Article ID: | iaor20053206 |
Country: | Netherlands |
Volume: | 20 |
Issue: | 4 |
Start Page Number: | 671 |
End Page Number: | 681 |
Publication Date: | Oct 2004 |
Journal: | International Journal of Forecasting |
Authors: | Heravi Saeed M., Easaw Joshy Z. |
Keywords: | forecasting: applications |
This paper investigates empirically whether consumer sentiments indices, based on surveys compiled by GfK, forecast household consumption types for the UK. Firstly, we use a quantitative equation approach to assess whether the indices are able to forecast household consumption growth in addition to traditional variables, which are included as control variables. Subsequently, using qualitative directional analysis, we investigate whether the indices are accurate and useful predictors as well. We find that, broadly speaking, both the headline, or aggregate, and the major purchasing indices have some predictive powers in addition to the control variables and are also directionally accurate and useful.