Consumer Confidence and Household Saving Behaviors: A Cross-Country Empirical Analysis

The global financial crisis wreaked havoc on the European economy and dented consumer confidence. This paper exploits a panel dataset of 18 EU countries over the period 2001–2014 to examine whether this decrease in consumer confidence affected household saving behaviors and if so, which specific sub...

Full description

Saved in:
Bibliographic Details
Published in:Social indicators research 2020, Vol.147 (2), p.677-721
Main Authors: Vanlaer, Willem, Bielen, Samantha, Marneffe, Wim
Format: Article
Language:English
Subjects:
Comparative analysis
Confidence
Consumer attitudes
Consumer Confidence Index
Currency devaluation
Economic crisis
Economic models
Households
Human Geography
Microeconomics
Original Research
Panel data
Public Health
Quality of Life Research
Savings
Social research
Social Sciences
Sociology
Trust
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The global financial crisis wreaked havoc on the European economy and dented consumer confidence. This paper exploits a panel dataset of 18 EU countries over the period 2001–2014 to examine whether this decrease in consumer confidence affected household saving behaviors and if so, which specific sub-indicators of consumer sentiment played the most significant role. To tackle the issue of potential endogeneity between household saving rates and consumer confidence, we use an instrumental variable approach. Our results suggest that confidence in household financial situations has a substantially larger effect on household saving than confidence in the general economic situation. Moreover, we find that the impact of consumer confidence on household saving has increased after the crisis, potentially due to a threshold effect.
ISSN:0303-8300
1573-0921
DOI:10.1007/s11205-019-02170-4