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Assessing consistency of consumer confidence data using latent class analysis with time factor

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  • Kumar, Sunil
  • Husain, Zakir
  • Mukherjee, Diganta

Abstract

In many countries information on expectations collected through consumer confidence surveys are used in macroeconomic policy formulation. Unfortunately, before doing so, the consistency of responses is often not taken into account, leading to biases creeping in and, in turn, affecting the consistency of the indices hence created. This paper describes how latent class analysis may be used to check the consistency of responses and ensure parsimony in the questionnaire. In particular, we examine how temporal changes may be incorporated into the model. Our methodology is illustrated using three rounds of Consumer Confidence Survey (CCS) conducted by Reserve Bank of India (RBI).

Suggested Citation

  • Kumar, Sunil & Husain, Zakir & Mukherjee, Diganta, 2017. "Assessing consistency of consumer confidence data using latent class analysis with time factor," Economic Analysis and Policy, Elsevier, vol. 55(C), pages 35-46.
    • Handle: RePEc:eee:ecanpo:v:55:y:2017:i:c:p:35-46
    DOI: 10.1016/j.eap.2017.04.004
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    Cited by:

    1. Kumar Sunil & Dabgotra Apurba Vishal, 2021. "A latent class analysis on the usage of mobile phones among management students," Statistics in Transition New Series, Polish Statistical Association, vol. 22(1), pages 89-114, March.
    2. Sunil Kumar & Apurba Vishal Dabgotra, 2021. "A latent class analysis on the usage of mobile phones among management students," Statistics in Transition New Series, Polish Statistical Association, vol. 22(1), pages 89-114, March.

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    More about this item

    Keywords

    Latent class analysis; Reliability analysis; Consumer confidence survey; India;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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