The contribution of E.C. consumer surveys in forecasting consumer expenditures: An econometric analysis for four major countries

In this article we investigate the forecasting performance of alternative models of private consumption using the EEC consumer surveys. Two basic conclusions emerge from the study: (1) in absolute as well as in comparison with a standard economic model, consumption functions incorporating opinion va...

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Bibliographic Details
Published in:Journal of economic psychology 1984-06, Vol.5 (2), p.101-124
Main Authors: Praet, Peter, Vuchelen, Jozef
Format: Article
Language:English
Subjects:
Behavior. Attitude
Biological and medical sciences
Fundamental and applied biological sciences. Psychology
Psychology. Psychoanalysis. Psychiatry
Psychology. Psychophysiology
Social psychology
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Summary:In this article we investigate the forecasting performance of alternative models of private consumption using the EEC consumer surveys. Two basic conclusions emerge from the study: (1) in absolute as well as in comparison with a standard economic model, consumption functions incorporating opinion variables perform surprisingly well given the important measurement problems (missing data, qualitative character of the responses, strong collinearity among responses), and (2) consumers' opinions are helpful guides only in very short-term forecasting (between 0 and 3 quarters). The article extends previous investigations both on the basic characteristics of opinion variables and on their relation with actual economic variables.
ISSN:0167-4870
1872-7719
DOI:10.1016/0167-4870(84)90001-1