IDEAS home Printed from https://ideas.repec.org/a/spr/soinre/v123y2015i1p281-302.html
   My bibliography  Save this article

Concepts of Confidence in Tendency Survey Research: An Assessment with Multi-group Confirmatory Factor Analysis

Author

Listed:
  • Piotr Białowolski

Abstract

In this paper, we investigate the link between the formal definition of confidence in tendency surveys and its measurement. We advocate for the use of reflective measures in an assessment of the confidence level in both consumer and industrial indicators. Based on the data from Poland’s tendency survey research, we use a multi-group confirmatory factor analytical approach to demonstrate that the set of indicators proposed by the European Commission methodology that is currently used might be not appropriate to measure the concept of confidence consistently, both within and between periods. The conclusion is true for the confidence indicator in the area of consumer tendency surveys and for the tendency survey in the manufacturing industry. We search for possible amendments that help either to find the sources of instability for the indicators proposed by the guidelines of the European Commission or to select a different set of indicators for the concept of confidence. However, we determine that the differences between the newly proposed indicator that describe industrial confidence and the indicators based on the European Commission methodology are small in terms of correlations and predictive validity. Copyright The Author(s) 2015

Suggested Citation

  • 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.
    • Handle: RePEc:spr:soinre:v:123:y:2015:i:1:p:281-302
    DOI: 10.1007/s11205-014-0736-1
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11205-014-0736-1
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11205-014-0736-1?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. Kumar, V. & Leone, Robert P. & Gaskins, John N., 1995. "Aggregate and disaggregate sector forecasting using consumer confidence measures," International Journal of Forecasting, Elsevier, vol. 11(3), pages 361-377, September.
    2. Roberto Golinelli & Giuseppe Parigi, 2004. "Consumer Sentiment and Economic Activity: A Cross Country Comparison," Journal of Business Cycle Measurement and Analysis, OECD Publishing, Centre for International Research on Economic Tendency Surveys, vol. 2004(2), pages 147-170.
    3. Giuseppe Nicoletti & Stefano Scarpetta & Olivier Boylaud, 2000. "Summary Indicators of Product Market Regulation with an Extension to Employment Protection Legislation," OECD Economics Department Working Papers 226, OECD Publishing.
    4. 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.
    5. Wilcox, James B. & Howell, Roy D. & Breivik, Einar, 2008. "Questions about formative measurement," Journal of Business Research, Elsevier, vol. 61(12), pages 1219-1228, December.
    6. 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.
    7. Mauro Costantini, 2013. "Forecasting the industrial production using alternative factor models and business survey data," Journal of Applied Statistics, Taylor & Francis Journals, vol. 40(10), pages 2275-2289, October.
    8. Andrew Sharpe & Brendon Andrews, 2012. "An Assessment of Weighting Methodologies for Composite Indicators: The case of the Index of Economic Well-being," CSLS Research Reports 2012-10, Centre for the Study of Living Standards.
    9. 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.
    10. Diamantopoulos, Adamantios, 2010. "Reflective and formative metrics of relationship value: Response to Baxter's commentary essay," Journal of Business Research, Elsevier, vol. 63(1), pages 91-93, January.
    11. Jansen, W. Jos & Nahuis, Niek J., 2003. "The stock market and consumer confidence: European evidence," Economics Letters, Elsevier, vol. 79(1), pages 89-98, April.
    12. Martijn G. De Jong & Jan-Benedict E. M. Steenkamp & Jean-Paul Fox, 2007. "Relaxing Measurement Invariance in Cross-National Consumer Research Using a Hierarchical IRT Model," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 34(2), pages 260-278, June.
    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. 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.
    15. Vuchelen, Jef, 2004. "Consumer sentiment and macroeconomic forecasts," Journal of Economic Psychology, Elsevier, vol. 25(4), pages 493-506, August.
    16. Steenkamp, Jan-Benedict E M & Baumgartner, Hans, 1998. "Assessing Measurement Invariance in Cross-National Consumer Research," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 25(1), pages 78-90, June.
    17. Victor Zarnowitz, 1992. "Business Cycles: Theory, History, Indicators, and Forecasting," NBER Books, National Bureau of Economic Research, Inc, number zarn92-1, March.
    18. Diamantopoulos, Adamantios & Riefler, Petra & Roth, Katharina P., 2008. "Advancing formative measurement models," Journal of Business Research, Elsevier, vol. 61(12), pages 1203-1218, December.
    19. Coltman, Tim & Devinney, Timothy M. & Midgley, David F. & Venaik, Sunil, 2008. "Formative versus reflective measurement models: Two applications of formative measurement," Journal of Business Research, Elsevier, vol. 61(12), pages 1250-1262, December.
    20. Baxter, Roger, 2009. "Reflective and formative metrics of relationship value: A commentary essay," Journal of Business Research, Elsevier, vol. 62(12), pages 1370-1377, December.
    21. Harold T. Shapiro & Gerald E. Angevine, 1969. "Consumer Attitudes, Buying Intentions and Expenditures: An Analysis of the Canadian Data," Canadian Journal of Economics, Canadian Economics Association, vol. 2(2), pages 230-249, May.
    22. Christian Gayer & Julien Genet, 2006. "Using factor models to construct composite indicators from BCS data - a comparison with European Commission confidence indicators," European Economy - Economic Papers 2008 - 2015 240, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    23. Andrea Saltelli, 2007. "Composite Indicators between Analysis and Advocacy," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 81(1), pages 65-77, March.
    24. Piotr Białowolski & Tomasz Kuszewski & Bartosz Witkowski, 2014. "Bayesian averaging of classical estimates in forecasting macroeconomic indicators with application of business survey data," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(1), pages 53-68, February.
    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. Antonio Acconcia & Maria Carannante & Michelangelo Misuraca & Germana Scepi, 2020. "Measuring Vulnerability to Poverty with Latent Transition Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 151(1), pages 1-31, August.

    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. 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.
    2. Ivana Lolić & Marija Logarušić & Mirjana Čižmešija, 2022. "Recent Revision of the European Consumer Confidence Indicator: Is There any additional Space for Improvement?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 159(3), pages 845-863, February.
    3. Ulaga, Wolfgang, 2011. "Investigating customer value in global business markets: Commentary essay," Journal of Business Research, Elsevier, vol. 64(8), pages 928-930, August.
    4. 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.
    5. 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.
    6. Laura Nowzohour & Livio Stracca, 2020. "More Than A Feeling: Confidence, Uncertainty, And Macroeconomic Fluctuations," Journal of Economic Surveys, Wiley Blackwell, vol. 34(4), pages 691-726, September.
    7. Petar Sorić & Mirjana Čižmešija & Marina Matošec, 2020. "EU Consumer Confidence and the New Modesty Hypothesis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(3), pages 899-921, December.
    8. 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.
    9. 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.
    10. Bèzes, Christophe, 2014. "Definition and psychometric validation of a measurement index common to website and store images," Journal of Business Research, Elsevier, vol. 67(12), pages 2559-2578.
    11. 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.
    12. Yeung, Matthew C.H. & Ramasamy, Bala & Chen, Junsong & Paliwoda, Stan, 2013. "Customer satisfaction and consumer expenditure in selected European countries," International Journal of Research in Marketing, Elsevier, vol. 30(4), pages 406-416.
    13. Samy Katumba & Julia Kadt & Mark Orkin & Paul Fatti, 2022. "Construction of a Reflective Quality of Life Index for Gauteng Province in South Africa," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(1), pages 373-408, November.
    14. Justina GineikienÄ—, 2013. "Consumer Nostalgia Literature Review And An Alternative Measurement Perspective," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 4(2).
    15. Zhuomin Shi & Zaoying Kuang & Ning Yang, 2017. "Why it is hard to explain Chinese face?—FACE measurement models and its influence on ecological product preference," Frontiers of Business Research in China, Springer, vol. 11(1), pages 1-22, December.
    16. 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.
    17. Sarstedt, Marko & Hair, Joseph F. & Ringle, Christian M. & Thiele, Kai O. & Gudergan, Siegfried P., 2016. "Estimation issues with PLS and CBSEM: Where the bias lies!," Journal of Business Research, Elsevier, vol. 69(10), pages 3998-4010.
    18. Grahame R. Dowling & Tayo Otubanjo, 2011. "Corporate and organizational identity: two sides of the same coin," AMS Review, Springer;Academy of Marketing Science, vol. 1(3), pages 171-182, December.
    19. Annalina Sarra & Eugenia Nissi, 2020. "A Spatial Composite Indicator for Human and Ecosystem Well-Being in the Italian Urban Areas," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 148(2), pages 353-377, April.
    20. 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.

    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:spr:soinre:v:123:y:2015:i:1:p:281-302. See general information about how to correct material in RePEc.

    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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.