Consumers Sentiment and Cognitive Macroeconometrics Paradoxes and Explanations
AbstractUsing 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by ISTAT - Italian National Institute of Statistics - (Rome, ITALY) in its series ISAE Working Papers with number 66.
Length: 48 pages
Date of creation: Apr 2006
Date of revision:
Beliefs; survey research; consumer sentiment; cognitive economics.;
Other versions of this item:
- Maurizio Bovi, 2005. "Consumers Sentiment and Cognitive Macroeconometrics Paradoxes and Explanations," Macroeconomics 0512002, EconWPA.
- C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
- C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-02-24 (All new papers)
- NEP-CBE-2007-02-24 (Cognitive & Behavioural Economics)
- NEP-NEU-2007-02-24 (Neuroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alan S. Blinder & Alan B. Krueger, 2004.
"What Does the Public Know about Economic Policy, and How Does It Know It?,"
103, Princeton University, Department of Economics, Center for Economic Policy Studies..
- Author-Name: Alan S. Blinder & Alan B. Krueger, 2004. "What Does the Public Know about Economic Policy, and How Does It Know It?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(1), pages 327-397.
- Alan S. Blinder & Alan B. Krueger, 2004. "What Does the Public Know about Economic Policy, and How Does It Know It?," NBER Working Papers 10787, National Bureau of Economic Research, Inc.
- Blinder, Alan S. & Krueger, Alan B., 2004. "What Does the Public Know about Economic Policy, and How Does It Know It?," IZA Discussion Papers 1324, Institute for the Study of Labor (IZA).
- Smith, Vernon L, 1976. "Experimental Economics: Induced Value Theory," American Economic Review, American Economic Association, vol. 66(2), pages 274-79, May.
- Ciaran Driver & Giovanni Urga, 2004. "Transforming Qualitative Survey Data: Performance Comparisons for the UK," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(1), pages 71-89, 02.
- F. Thomas Juster, 1964. "Anticipations and Purchases: An Analysis of Consumer Behavior," NBER Books, National Bureau of Economic Research, Inc, number just64-1, December.
- Charles F. Manski, 2004. "Measuring Expectations," Econometrica, Econometric Society, vol. 72(5), pages 1329-1376, 09.
- Christopher D Carroll, 2002.
"Macroeconomic Expectations of Households and Professional Forecasters,"
Economics Working Paper Archive
477, The Johns Hopkins University,Department of Economics.
- Christopher D. Carroll, 2003. "Macroeconomic Expectations Of Households And Professional Forecasters," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 269-298, February.
- Melvin Stephens, 2004.
"Job Loss Expectations, Realizations, and Household Consumption Behavior,"
The Review of Economics and Statistics,
MIT Press, vol. 86(1), pages 253-269, February.
- Melvin Stephens, Jr., 2003. "Job Loss Expectations, Realizations, and Household Consumption Behavior," NBER Working Papers 9508, National Bureau of Economic Research, Inc.
- James Mitchell & Richard J. Smith & Martin R. Weale, 2005. "Forecasting Manufacturing Output Growth Using Firm-Level Survey Data," Manchester School, University of Manchester, vol. 73(4), pages 479-499, 07.
- Shleifer, Andrei, 2000. "Inefficient Markets: An Introduction to Behavioral Finance," OUP Catalogue, Oxford University Press, number 9780198292272.
- Souleles, Nicholas S, 2004. "Expectations, Heterogeneous Forecast Errors, and Consumption: Micro Evidence from the Michigan Consumer Sentiment Surveys," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(1), pages 39-72, February.
- Richard M. Cyert & Herbert A. Simon & Donald B. Trow, 1956. "Observation of a Business Decision," The Journal of Business, University of Chicago Press, vol. 29, pages 237.
- repec:pri:indrel:875 is not listed on IDEAS
- Magnus Forsells & Geoff Kenny, 2004. "Survey Expectations, Rationality and the Dynamics of Euro Area Inflation," Journal of Business Cycle Measurement and Analysis, OECD Publishing,CIRET, vol. 2004(1), pages 13-41.
- Shiller, Robert J, 1981.
"Do Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends?,"
American Economic Review,
American Economic Association, vol. 71(3), pages 421-36, June.
- Robert J. Shiller, 1980. "Do Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends?," NBER Working Papers 0456, National Bureau of Economic Research, Inc.
- Jeff Dominitz & Charles F. Manski, 2003. "How Should We Measure Consumer Confidence (Sentiment)? Evidence from the Michigan Survey of Consumers," NBER Working Papers 9926, National Bureau of Economic Research, Inc.
- Das, J.W.M. & Dominitz, J. & Soest, A.H.O. van, 1998.
"Comparing predictions and outcomes: theory and application to income changes,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-121742, Tilburg University.
- Das, J.W.M. & Dominitz, J. & Soest, A.H.O. van, 1997. "Comparing Predictions and Outcomes: Theory and Application to Income Changes," Discussion Paper 1997-45, Tilburg University, Center for Economic Research.
- repec:pri:cepsud:103 is not listed on IDEAS
- Jeff Dominitz & Charles F. Manski, 2004. "How Should We Measure Consumer Confidence?," Journal of Economic Perspectives, American Economic Association, vol. 18(2), pages 51-66, Spring.
- Jeff Dominitz, 1998. "Earnings Expectations, Revisions, And Realizations," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 374-388, August.
- Christopher D. Carroll, 2001.
"The Epidemiology of Macroeconomic Expectations,"
NBER Working Papers
8695, National Bureau of Economic Research, Inc.
- Maurizio Bovi, 2004. "Consumer Surveys and Reality," Macroeconomics 0408012, EconWPA.
- Sydney C. Ludvigson, 2004. "Consumer Confidence and Consumer Spending," Journal of Economic Perspectives, American Economic Association, vol. 18(2), pages 29-50, Spring.
- James Mitchell & Martin Weale, 2005. "Quantitative inference from qualitative business survey panel data: a microeconometric approach," NIESR Discussion Papers 261, National Institute of Economic and Social Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stefania Rossetti).
If references are entirely missing, you can add them using this form.