Backward assessments or expectations: what determines the consumer confidence index more strongly? Panel model based on the CCI of European countries

Abstract

The consumer confidence index (CCI) is an index constructed on the basis of subjective assessments of the economic situation (retroactive and future), in many studies used as a variable supplementing the forecasting of consumer behaviour. Its significance is evidenced by the literature on consumer sentiment. Research on developed, economically stable countries focuses on assessments of the economic situation in the preceding period. On the other hand, according to many authors, the analysis of economically unstable states should focus on the expectations of respondents. The aim of the study is to check which respondent assessments (retroactive or expectations for the future) have a statistically significant impact on the level of the CCI and to examine the differences in respondent assessments between countries (cross-sectionally), as well as the time differences (time series effects). The panel modelling was carried out using data for the CCI as a dependent variable and a set of independent variables for all European Union countries and five non-member states. The data were collected from the Eurostat database. The analysis period of seven years and five months (January 2015–May 2022) results from the availability of data. The SAS 9.4 software was used in this research. The results of the survey showed that higher expectations of respondents result in a higher CCI, and that they have a statistically significant impact on the level of the index. The modelling also demonstrated that the differences in respondent’ assessments between countries are significant, whereas the time differences are not.

Differentiation of European Households Living Rural Areas Including Subjective Assessments of Their Financial and Economic Situation – Comparative Analysis

“…Thus, disposable income has a significant impact on the subjective assessments of the financial situation of households, but this impact is complex and can be modified by various factors such as income inequality, cultural context. Subjective assessments of financial situation can also be shaped by psychological factors, such as perceptions of relative social position and comparisons with other households [Szopa, Leszczyńska 2004, Keese 2012, Parlińska, Pietrych 2014, Mahdzan et al 2019, Wołoszyn et al 2019, Downward et al 2020, Grzywińska-Rąpca, Ptak-Chmielewska 2023. A higher income does not always automatically mean a greater sense of satisfaction or a better assessment of the financial situation, as other factors such as debt levels, lifestyle or inflation rates also play a role.…”