IDEAS home Printed from https://ideas.repec.org/a/eee/joepsy/v70y2019icp109-124.html
   My bibliography  Save this article

Climbing out of an economic crisis: A cycle of consumer sentiment and personal stress

Author

Listed:
  • van Giesen, Roxanne I.
  • Pieters, Rik

Abstract

This research examines bidirectional relationships between consumer sentiment and personal stress. It seeks to answer the question whether reduced consumer sentiment (consumer perceptions about the global, national and personal economic situation) raises personal stress levels, and whether increased personal stress levels depresses consumer sentiment. Finding such relationships would reveal a pathway from economic to personal well-being, as reflected in personal stress, and the other way around. A large longitudinal study in the Netherlands with a total of eight waves across three years (2012–2014), 4 waves during and 4 waves after the recent worldwide economic crisis, finds on average low personal stress levels among consumers, which is reassuring. Also and as expected, consumers are more positive about the state of the economy after than during the crisis. Importantly, more positive consumer sentiment indeed contributes to lower levels of personal stress. Moreover, the more personal stress consumers experience, the more pessimistic they are about the state of the economy after the crisis, whereas this connection is weaker during the crisis. This sheds new light on the pathways between consumer sentiment about the economy and their personal well-being.

Suggested Citation

  • van Giesen, Roxanne I. & Pieters, Rik, 2019. "Climbing out of an economic crisis: A cycle of consumer sentiment and personal stress," Journal of Economic Psychology, Elsevier, vol. 70(C), pages 109-124.
  • Handle: RePEc:eee:joepsy:v:70:y:2019:i:c:p:109-124
    DOI: 10.1016/j.joep.2018.12.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167487018300916
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.joep.2018.12.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stephane Dees & Pedro Soares Brinca, 2013. "Consumer confidence as a predictor of consumption spending: Evidence for the United States and the Euro area," International Economics, CEPII research center, issue 134, pages 1-14.
    2. Dixon, R. & Griffiths, W. & Lim, G.C., 2014. "Lay people’s models of the economy: A study based on surveys of consumer sentiments," Journal of Economic Psychology, Elsevier, vol. 44(C), pages 13-20.
    3. Nguyen, Viet Hoang & Claus, Edda, 2013. "Good news, bad news, consumer sentiment and consumption behavior," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 426-438.
    4. Douglas L. Miller & Marianne E. Page & Ann Huff Stevens & Mateusz Filipski, 2009. "Why Are Recessions Good for Your Health?," American Economic Review, American Economic Association, vol. 99(2), pages 122-127, May.
    5. Moritz Schularick & Alan M. Taylor, 2012. "Credit Booms Gone Bust: Monetary Policy, Leverage Cycles, and Financial Crises, 1870-2008," American Economic Review, American Economic Association, vol. 102(2), pages 1029-1061, April.
    6. Kajal Lahiri & George Monokroussos & Yongchen Zhao, 2016. "Forecasting Consumption: the Role of Consumer Confidence in Real Time with many Predictors," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(7), pages 1254-1275, November.
    7. Robert Cummins, 2000. "Personal Income and Subjective Well-being: A Review," Journal of Happiness Studies, Springer, vol. 1(2), pages 133-158, June.
    8. Weijters, Bert & Geuens, Maggie & Schillewaert, Niels, 2009. "The proximity effect: The role of inter-item distance on reverse-item bias," International Journal of Research in Marketing, Elsevier, vol. 26(1), pages 2-12.
    9. Hollanders, David & Vliegenthart, Rens, 2011. "The influence of negative newspaper coverage on consumer confidence: The Dutch case," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 367-373, June.
    10. Zullow, Harold M., 1991. "Pessimistic rumination in popular songs and newsmagazines predict economic recession via decreased consumer optimism and spending," Journal of Economic Psychology, Elsevier, vol. 12(3), pages 501-526, September.
    11. Lemmens, A. & Croux, C. & Dekimpe, M.G., 2007. "Consumer confidence in Europe : United in diversity," Other publications TiSEM ea8c3268-2c0b-4fcc-9d4a-6, Tilburg University, School of Economics and Management.
    12. repec:cii:cepiei:2013-q2-134-1 is not listed on IDEAS
    13. Ramalho, Esmeralda A. & Caleiro, António & Dionfsio, Andreia, 2011. "Explaining consumer confidence in Portugal," Journal of Economic Psychology, Elsevier, vol. 32(1), pages 25-32, February.
    14. Vuchelen, Jef, 2004. "Consumer sentiment and macroeconomic forecasts," Journal of Economic Psychology, Elsevier, vol. 25(4), pages 493-506, August.
    15. Richard Curtin, 2007. "Consumer Sentiment Surveys: Worldwide Review and Assessment," Journal of Business Cycle Measurement and Analysis, OECD Publishing, Centre for International Research on Economic Tendency Surveys, vol. 2007(1), pages 7-42.
    16. Suzanna De Boef & Paul M. Kellstedt, 2004. "The Political (and Economic) Origins of Consumer Confidence," American Journal of Political Science, John Wiley & Sons, vol. 48(4), pages 633-649, October.
    17. E. Philip Howrey, 2001. "The Predictive Power of the Index of Consumer Sentiment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 175-216.
    18. Gärling, Tommy & Kirchler, Erich & Lewis, Alan & van Raaij, Fred, 2009. "Psychology, Financial Decision Making, and Financial Crises," Sustainable Investment and Corporate Governance Working Papers 2009/7, Sustainable Investment Research Platform.
    19. Vuchelen, Jef, 1995. "Political events and consumer confidence in Belgium," Journal of Economic Psychology, Elsevier, vol. 16(4), pages 563-579, December.
    20. Rik Pieters, 2013. "Bidirectional Dynamics of Materialism and Loneliness: Not Just a Vicious Cycle," Journal of Consumer Research, Oxford University Press, vol. 40(4), pages 615-631.
    21. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
    22. Ruhm, Christopher J., 2015. "Recessions, healthy no more?," Journal of Health Economics, Elsevier, vol. 42(C), pages 17-28.
    23. MacFadyen, Alan J. & MacFadyen, Heather Wood & Prince, Nancy J., 1996. "Economic stress and psychological well-being: An economic psychology framework," Journal of Economic Psychology, Elsevier, vol. 17(3), pages 291-311, June.
    24. Abeele, P. Vanden, 1983. "The index of consumer sentiment: Predictability and predictive power in the EEC," Journal of Economic Psychology, Elsevier, vol. 3(1), pages 1-17.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marwane El Alaoui & Elie Bouri & Nehme Azoury, 2020. "The Determinants of the U.S. Consumer Sentiment: Linear and Nonlinear Models," IJFS, MDPI, vol. 8(3), pages 1-13, July.
    2. Botha, Ferdi & Nguyen, Viet H., 2022. "Opposite nonlinear effects of unemployment and sentiment on male and female suicide rates: Evidence from Australia," Social Science & Medicine, Elsevier, vol. 292(C).
    3. Melanie Koch & Thomas Scheiber, 2022. "Household savings in CESEE: expectations, experiences and common predictors," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue Q1/22, pages 29-54.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kajal Lahiri & Yongchen Zhao, 2016. "Determinants of Consumer Sentiment Over Business Cycles: Evidence from the US Surveys of Consumers," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 12(2), pages 187-215, December.
    2. Aneta M. Klopocka & Rumiana Gorska, 2021. "Forecasting Household Saving Rate with Consumer Confidence Indicator and its Components: Panel Data Analysis of 14 European Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 874-898.
    3. Camilo Alberto Cárdenas-Hurtado & María Alejandra Hernández-Montes, 2019. "Understanding the Consumer Confidence Index in Colombia: A structural FAVAR analysis," Borradores de Economia 1063, Banco de la Republica de Colombia.
    4. Aneta Maria Kłopocka, 2017. "Does Consumer Confidence Forecast Household Saving and Borrowing Behavior? Evidence for Poland," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(2), pages 693-717, September.
    5. Marina Matosec & Zdenka Obuljen Zoricic, 2019. "Identifying the Interdependence between Consumer Confidence and Macroeconomic Developments in Croatia," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 17(2-B), pages 345-354.
    6. Abosedra, Salah & Laopodis, Nikiforos T. & Fakih, Ali, 2021. "Dynamics and asymmetries between consumer sentiment and consumption in pre- and during-COVID-19 time: Evidence from the US," The Journal of Economic Asymmetries, Elsevier, vol. 24(C).
    7. Vuchelen, Jef, 2004. "Consumer sentiment and macroeconomic forecasts," Journal of Economic Psychology, Elsevier, vol. 25(4), pages 493-506, August.
    8. Christian Gayer & Alessandro Girardi & Andreas Reuter, 2016. "Replacing Judgment by Statistics: Constructing Consumer Confidence Indicators on the basis of Data-driven Techniques. The Case of the Euro Area," Working Papers LuissLab 16125, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    9. Hector H. Sandoval & Anita N. Walsh, 2021. "The role of consumer confidence in forecasting consumption, evidence from Florida," Southern Economic Journal, John Wiley & Sons, vol. 88(2), pages 757-788, October.
    10. Petar Soric & Mateo Zokalj & Marija Logarusic, 2020. "Economic determinants of Croatian consumer confidence: real estate prices vs. macroeconomy," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 18(2B), pages 240-257.
    11. Eleni Zafeiriou & Constantinos Katrakilidis & Chrysanthi Pegiou, 2019. "Consumer Confidence on Heating Oil Prices: An Empirical Study of their Relationship for European Union in a Nonlinear Framework," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 63-90.
    12. Sercin Sahin, 2021. "Consumer confidence, consumption, and macroeconomic fluctuations: A systemic stock‐flow consistent model," Metroeconomica, Wiley Blackwell, vol. 72(4), pages 868-904, November.
    13. Paradiso, Antonio & Kumar, Saten & Margani, Patrizia, 2014. "Are Italian consumer confidence adjustments asymmetric? A macroeconomic and psychological motives approach," Journal of Economic Psychology, Elsevier, vol. 43(C), pages 48-63.
    14. Hollanders, D.A. & Vliegenthart, R., 2009. "The Influence of Negative Newspaper Coverage on Consumer Confidence : The Dutch Case," Other publications TiSEM fc1678e6-b3ab-4d80-8c87-c, Tilburg University, School of Economics and Management.
    15. Piotr Białowolski, 2015. "Concepts of Confidence in Tendency Survey Research: An Assessment with Multi-group Confirmatory Factor Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 123(1), pages 281-302, August.
    16. Juan Yao & Graham Partington & Max Stevenson, 2013. "Predicting the directional change in consumer sentiment," Australian Journal of Management, Australian School of Business, vol. 38(1), pages 67-80, April.
    17. Sudeshna Ghosh, 2021. "Consumer Confidence and Consumer Spending in Brazil: A Nonlinear Autoregressive Distributed Lag Model Analysis," Arthaniti: Journal of Economic Theory and Practice, , vol. 20(1), pages 53-85, June.
    18. Simona Malovaná & Martin Hodula & Jan Frait, 2021. "What Does Really Drive Consumer Confidence?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(3), pages 885-913, June.
    19. Baghestani, Hamid, 2021. "Predicting growth in US durables spending using consumer durables-buying attitudes," Journal of Business Research, Elsevier, vol. 131(C), pages 327-336.
    20. Hatice Gökçe Karasoy Can & Çağlar Yüncüler, 2018. "The Explanatory Power and the Forecast Performance of Consumer Confidence Indices for Private Consumption Growth in Turkey," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(9), pages 2136-2152, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joepsy:v:70:y:2019:i:c:p:109-124. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/joep .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/joep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.