Proceedings of the New York State Economics Association


Factors Determining Consumer Sentiment - Evidence from Household Survey Data

Kajal Lahiri and Yongchen Zhao

vol. 4, September 2011, p. 97-106


Consumer sentiment is essential in policy-making and consumption forecasting due to the wealth of information contained in such measure. Unfortunately, such information is not clearly identified in the literature. We study the five components of University of Michigan’s consumer sentiment index using household survey data from January 1978 to March 2009 in nonparametric ordered choice model. We find that the most important factors affecting consumer sentiment are their own perceptions and expectations on the economic conditions, the effectiveness of government policies, and news reports. After controlling for these factors, demographic characteristics, macroeconomic conditions and forecasts account for little in addition.


suggested citation:

Kajal Lahiri and Yongchen Zhao. "Factors Determining Consumer Sentiment - Evidence from Household Survey Data." Proceedings of the New York State Economics Association. vol. 4, September 2011, p. 97-106

BibTeX entry    download