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Which survey indicators are useful for monitoring consumption? Evidence from European countries


  • W. Jos Jansen

    (Monetary and Economic Policy Department, De Nederlandsche Bank, Amsterdam, The Netherlands)

  • Niek J. Nahuis

    (Economic Policy Department, Ministry of Finance, The Hague, The Netherlands)


This paper assesses the information content of two survey indicators for consumption developments in the near future for eight European countries in the period 1985-1998. Empirical work on this topic typically focuses on consumer confidence, the perceptions of buyers of consumption goods. This paper examines whether perceptions of sellers of consumption goods, measured by retail trade surveys, may also improve short-term monitoring of consumption. We find that both consumer confidence and retailer confidence embody valuable information, when analysed in isolation. For France, Italy and Spain we conclude that adding retail confidence does not improve the indicator model once consumer confidence has been included. For the UK the reverse case is obtained. For the remaining four countries we show that combining consumer sentiment and retail trade confidence into a composite indicator leads to optimal results. Our results suggest that incorporating information from retail trade surveys may offer significant benefits for the analysis of short-term prospects of consumption. Copyright © 2004 John Wiley & Sons, Ltd.

Suggested Citation

  • W. Jos Jansen & Niek J. Nahuis, 2004. "Which survey indicators are useful for monitoring consumption? Evidence from European countries," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 23(2), pages 89-98.
  • Handle: RePEc:jof:jforec:v:23:y:2004:i:2:p:89-98 DOI: 10.1002/for.903

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    References listed on IDEAS

    1. Parigi, Giuseppe & Schlitzer, Giuseppe, 1997. "Predicting consumption of Italian households by means of survey indicators," International Journal of Forecasting, Elsevier, vol. 13(2), pages 197-209, June.
    2. Carroll, Christopher D & Fuhrer, Jeffrey C & Wilcox, David W, 1994. "Does Consumer Sentiment Forecast Household Spending? If So, Why?," American Economic Review, American Economic Association, vol. 84(5), pages 1397-1408, December.
    3. Djerf, Kari & Takala, Kari, 1997. "Macroeconomy and consumer sentiment : performance of the finnish consumer barometer after ten years," Research Discussion Papers 20/1997, Bank of Finland.
    4. Jason Bram & Sydney Ludvigson, 1998. "Does consumer confidence forecast household expenditure? a sentiment index horse race," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 59-78.
    5. Victor Zarnowitz, 1992. "Business Cycles: Theory, History, Indicators, and Forecasting," NBER Books, National Bureau of Economic Research, Inc, number zarn92-1, January.
    6. A. Bayar & K. Mc Morrow, 1999. "Determinants of private consumption," European Economy - Economic Papers 2008 - 2015 135, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    7. Batchelor, Roy & Dua, Pami, 1998. "Improving macro-economic forecasts: The role of consumer confidence," International Journal of Forecasting, Elsevier, vol. 14(1), pages 71-81, March.
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    Cited by:

    1. Ali Al-Eyd & Ray Barrell & E. Philip Davis, 2009. "Consumer Confidence Indices And Short-Term Forecasting Of Consumption," Manchester School, University of Manchester, vol. 77(1), pages 96-111, January.
    2. Joscha Beckmann & Ansgar Belke & Michael Kühl, 2011. "Global Integration of Central and Eastern European Financial Markets—The Role of Economic Sentiments," Review of International Economics, Wiley Blackwell, vol. 19(1), pages 137-157, February.
    3. Joscha Beckmann & Ansgar Belke & Michael Kühl, 2012. "The cross-country importance of global sentiments—evidence for smaller EU countries," International Economics and Economic Policy, Springer, vol. 9(3), pages 245-264, September.
    4. 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.
    5. Ansgar Belke & Joscha Beckmann & Michael Kühl, 2010. "Global Integration of Central and Eastern European Financial Markets – The Role of Economic Sentiments," Ruhr Economic Papers 0174, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    6. Mendonça, Helder Ferreira de, 2009. "Brazil: how macroeconomic variables affect consumer confidence," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    7. Dudek, Sławomir, 2008. "Consumer Survey Data and short-term forecasting of households consumption expenditures in Poland," MPRA Paper 19818, University Library of Munich, Germany.
    8. Gaston Giordana & Ingmar Schumacher, 2012. "Macroeconomic Conditions and Leverage in Monetary Financial Institutions: Comparing European countries and Luxembourg," BCL working papers 77, Central Bank of Luxembourg.
    9. repec:zbw:rwirep:0208 is not listed on IDEAS
    10. Simeon Vosen & Torsten Schmidt, 2012. "A monthly consumption indicator for Germany based on Internet search query data," Applied Economics Letters, Taylor & Francis Journals, vol. 19(7), pages 683-687, May.
    11. 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.
    12. Torsten Schmidt & Simeon Vosen, 2010. "A monthly consumption indicator for Germany based on internet search query data," Ruhr Economic Papers 0208, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    13. repec:zbw:rwirep:0174 is not listed on IDEAS

    More about this item

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications


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