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Consumers Sentiment and Cognitive Macroeconometrics Paradoxes and Explanations

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  • Maurizio Bovi

    (ISAE - Institute for Studies and Economic Analyses)

Abstract

Using data from the Business Surveys Unit of the European Commission as a long-running-continental-scale experiment, this paper examines how, and how accurately, people assess economic systems. Data show both commonsense (e.g. people know the past better than the future) and puzzling results (e.g. there is a systematic bias in forecasts). The former support the reliability of the surveys, the latter are in sharp contrast with the standard maintained hypothesis of a world populated by calculating and unemotional maximizers. The dualism of behavior may be fruitfully explored via cognitive psychology, according to which both logic and emotions systematically drive people’s choices.

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File URL: http://lipari.istat.it/digibib/Working_Papers/WP_66_2006_Bovi.pdf
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Bibliographic Info

Paper provided by ISTAT - Italian National Institute of Statistics - (Rome, ITALY) in its series ISAE Working Papers with number 66.

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Length: 48 pages
Date of creation: Apr 2006
Date of revision:
Handle: RePEc:isa:wpaper:66

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Keywords: Beliefs; survey research; consumer sentiment; cognitive economics.;

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