NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

How Should We Measure Consumer Confidence (Sentiment)? Evidence from the Michigan Survey of Consumers

Jeff Dominitz, Charles F. Manski

NBER Working Paper No. 9926
Issued in August 2003
NBER Program(s):   EFG

The Michigan Index of Consumer Sentiment (ICS) and other indices of consumer confidence are prominent in public discourse on the economy but have little presence in modern economic research. The sparsity of modern research follows an earlier period when economists scrutinized in some depth the methods and data used to produce consumer confidence indices. The literature to date has focused on the predictive power of the survey data used to form the indices; there has been very little study of their micro foundations. This paper analyzes the responses to eight expectations questions that have appeared on the Michigan Survey of Consumers in the period June 2002 through May 2003. Four questions elicit micro and macroeconomic expectations in the traditional qualitative manner; two are components of the ICS. Four questions use a percent chance' format to elicit subjective probabilities of micro and macroeconomic events; versions of these questions have previously appeared in the Survey of Economic Expectations.

download in pdf format
   (531 K)

email paper

This paper is available as PDF (531 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w9926

Published: Jeff Dominitz & Charles F. Manski, 2004. "How Should We Measure Consumer Confidence?," Journal of Economic Perspectives, American Economic Association, vol. 18(2), pages 51-66, Spring.

Users who downloaded this paper also downloaded these:
Barsky and Sims w15049 Information, Animal Spirits, and the Meaning of Innovations in Consumer Confidence
Souleles w8410 Consumer Sentiment: Its Rationality and Usefulness in Forecasting Expenditure - Evidence from the Michigan Micro Data
Qiu and Welch w10794 Investor Sentiment Measures
Dominitz and Manski w11313 Measuring and Interpreting Expectations of Equity Returns
Baker and Wurgler w13189 Investor Sentiment in the Stock Market
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us