Does consumer sentiment predict consumer spending in Malaysia? an autoregressive distributed lag (ARDL) approach

NorAzza Mohd Haniff and Abul Masih

MPRA Paper from University Library of Munich, Germany

Abstract: The purpose of this paper is to determine the nature of relationship between consumer sentiment and consumer spending in the Malaysian context. The autoregressive distributed lag (ARDL) methodology is employed to test this relationship, controlling for information in other financial and economic indicators. The stability of the functions is tested by CUSUM and CUSUMQ and no structural break was found. Overall, the results show that the Consumer Sentiment Index does not have any predictive value on consumer spending either in the shortrun or in the long-run, although a cointegrating relationship exists between the variables.

Keywords: consumer sentiment; consumer spending; ARDL; Malaysia (search for similar items in EconPapers)
JEL-codes: C22 C58 E2 (search for similar items in EconPapers)
Date: 2016-01-20
New Economics Papers: this item is included in nep-mac and nep-sea
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