Long Run Biases in Consumer Sentiment Micro Evidence from…消费者情绪中的长期偏差微观证据来自.pdfVIP

OECD WORKSHOP ON BUSINESS AND CONSUMER TENDENCY SURVEYS Long-Run Biases in Consumer Sentiment. Micro Evidence from European Surveys BY MAURIZIO BOVI ISAE - Institute for Studies and Economic Analyses Department of Macroeconomics E-mail: m.bovi@isae.it Rome, September 2006 Abstract Using micro data from the Business Surveys Unit of the European Commission, I perform a long-run analysis of people’s perception on the economic situation. Side by side with “logically expected” results, which I interpret as sustaining the reliability of the surveys, data also show “puzzling” outcomes. E.g., Europeans tend to judge over- pessimistically and to forecast over-optimistically. Cognitive psychology suggests that these emotionally-driven asymmetries could be “expected” as well. Thus, on the one hand, they do not affect the trustworthiness of survey data and, on the other hand, they recommend enriching the analysis of consumer sentiment indexes with psychological considerations. JEL Codes: C42, C82, D12, D84. Keywords: Consumer attitudes and behavior; consumer confidence, survey research, cognitive economics. 1. INTRODUCTION In many countries consumer sentiment indexes (CSI) play a relevant role in public discussions about the economic situation. A striking feature of CSI is that they are so commonly diffused and commented at their “face value”, that it seems that what is behind them be considered as known as not to require explanation. Possibly, this is so because mainstream literature (among others, Ludvigson, 2004) seems to support the existence of links between CSI and National Account data. Similarly, perhaps as a consequence of the everyday practice attitude, the economic l