Evaluating consumer sentiments as predictors of UK household consumption behavior: Are they accurate and useful?

This paper investigates empirically whether consumer sentiments indices, based on surveys complied by GfK, forecast household consumption types for the UK. Firstly, we use a quantitative equation approach to assess whether the indices are able to forecast household consumption growth in addition to...

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Bibliographic Details
Published inInternational journal of forecasting Vol. 20; no. 4; pp. 671 - 681
Main Authors Easaw, Joshy Z., Heravi, Saeed M.
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.10.2004
Elsevier
Elsevier Sequoia S.A
SeriesInternational Journal of Forecasting
Subjects
Consumer behavior
Consumer sentiments
Directional analysis
Forecastability
Forecasting
Household consumption behavior
Polls & surveys
Studies
Survey data
United Kingdom > UK
United States > US
Consumer sentiments
Forecastability
Household consumption behavior
Survey data
Directional analysis
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Summary:This paper investigates empirically whether consumer sentiments indices, based on surveys complied by GfK, forecast household consumption types for the UK. Firstly, we use a quantitative equation approach to assess whether the indices are able to forecast household consumption growth in addition to traditional variables, which are included as control variables. Subsequently, using qualitative directional analysis, we investigate whether the indices are accurate and useful predictors as well. We find that, broadly speaking, both the headline, or aggregate, and the major purchasing indices have some predictive powers in addition to the control variables and are also directionally accurate and useful.
ISSN:0169-2070
1872-8200
DOI:10.1016/j.ijforecast.2003.12.006