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Consumer Sentiment During the COVID-19 Pandemic: The Role of Others‘ Beliefs

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  • Bui, Dzung
  • Dräger, Lena
  • Hayo, Bernd
  • Nghiem, Giang

Abstract

This paper investigates the direct and indirect effects of others' beliefs on respondents' own beliefs and consumer sentiment. Conducting consumer surveys with randomized control trials (RCTs) in Thailand and Vietnam during the COVID-19 pandemic, we implement two information treatments. Both treatments contain cross-country information about others' beliefs about the appropriateness of the government's or the general public's reaction to the pandemic. The first treatment is asymmetric across our sample countries, as it shows opposite appropriateness ratings of the governments' reaction in Vietnam and Thailand, whereas the second treatment is rather symmetric. We find that the information treatments affect consumer sentiment only in Vietnam, where the sign of the effect suggests that the treatments are viewed as positive news. Moreover, consumer sentiment in Vietnam is strongly affected by both treatments when the information goes against respondents' prior beliefs.

Suggested Citation

  • Bui, Dzung & Dräger, Lena & Hayo, Bernd & Nghiem, Giang, 2020. "Consumer Sentiment During the COVID-19 Pandemic: The Role of Others‘ Beliefs," Hannover Economic Papers (HEP) dp-680, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät, revised Apr 2021.
    • Handle: RePEc:han:dpaper:dp-680
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    Cited by:

    1. Balcaen, Pieter & Buts, Caroline & Bois, Cind Du & Tkacheva, Olesya, 2023. "The effect of disinformation about COVID-19 on consumer confidence: Insights from a survey experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 102(C).
    2. Buchheim, Lukas & Dovern, Jonas & Krolage, Carla & Link, Sebastian, 2022. "Sentiment and firm behavior during the COVID-19 pandemic," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 186-198.
    3. Dzung Bui & Lena Draeger & Bernd Hayo & Giang Nghiem, 2021. "The Effects of Fiscal Policy on Households during the COVID-19 Pandemic: Evidence from Emerging Economies," IMK Working Paper 211-2021, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    4. Bui, Dzung & Dräger, Lena & Hayo, Bernd & Nghiem, Giang, 2022. "The effects of fiscal policy on households during the COVID-19 pandemic: Evidence from Thailand and Vietnam," World Development, Elsevier, vol. 153(C).

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    More about this item

    Keywords

    Consumer sentiment; COVID-19; randomized control trial (RCT); survey experiment; second-order beliefs; belief updating; government trust; macroeconomic expectations; Thailand; Vietnam;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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