DOES CULTURE MATTER IN SETTING CONSUMER CONFIDENCE?

In this paper, we explore whether the diversity of consumer confidence indicators across different countries can be explained by diverse cultures in those countries. For this purpose, we consider the OECD consumer confidence indicators and macroeconomic indicators of 37 countries. In particular, we...

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Bibliographic Details
Published inEconomics & sociology Vol. 17; no. 2; pp. 11 - 36
Main Authors Eratalay, Hakan, Kaasa, Anneli
Format Journal Article
LanguageEnglish
Published Ternopil Centre of Sociological Research (NGO) 01.04.2024
Subjects
Borrowing
Collectivism
Confidence
Consumer behavior
Consumer spending
Consumers
COVID-19
Cultural change
Culture
Economic activity
Economic conditions
Economic crisis
Economic growth
GDP
Gross Domestic Product
Happiness
Individualism
Literature reviews
Macroeconomics
Recessions
Secularism
Traditionalism
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Summary:In this paper, we explore whether the diversity of consumer confidence indicators across different countries can be explained by diverse cultures in those countries. For this purpose, we consider the OECD consumer confidence indicators and macroeconomic indicators of 37 countries. In particular, we analyse the consumer confidence indicator levels in January of 2007 and 2009, that is before and during the financial crisis, and also in January of 2020 and 2021, which is before and during the Covid-19 crisis. For measuring culture, we use the two-dimensional models of Kaasa and Minkov (2022), Inglehart and Welzel (2021), Minkov and Kaasa (2022) and Beugelsdijk and Welzel (2018). We employ forward and backward stepwise regressions and principal components regressions for analysis. Our results show that in bad times consumer confidence is lower in cultures that are characterised by individualism (vs collectivism), responsibility (vs faith), secularism (vs traditionalism), and flexibility (vs monumentalism) compared to cultures characterised by the opposite. We have also found that the extent of the decline in consumer confidence during the crises, especially the Covid-19 crisis, was smaller in cultures characterised by freedom (vs concern), selfexpression (vs survival), and joy (vs duty) than in countries on the opposite side of the spectrum. Finally, we conclude that culture has clearly been more relevant for the change in consumer confidence during the Covid-19 crisis, as opposed to the financial crisis.
ISSN:2071-789X
2306-3459
DOI:10.14254/2071789X.2024/17-2/1Mustafa