Are Survey Indicators Useful for Monitoring Consumption Growth: Evidence from European Countries
This paper analyses the information content of two potential survey indicators for consumption growth. Most short-term analyses only focus on consumer confidence, which measures confidence of buyers of consumption goods. However, this paper shows that this is optimal for only three of the eight countries in our sample. For the other countries the retail sales indicator, a measure of confidence of sellers of consumption goods, can improve the quality of short-term analyses substantially. For the UK this indicator even outperforms consumer confidence. For the remaining four countries we show that combining consumer sentiment and the retail sales indicator into a composite indicator leads to optimal results.
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- Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
- 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.
- Fuhrer, Jeffrey C, 1988. "On the Information Content of Consumer Survey Expectations," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 140-44, February.
- 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.
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