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http://localhost:8080/xmlui/handle/123456789/435| Title: | Shedding Light on Consumer Sentiments: Evidence from India |
| Authors: | Banerjee, Anurag |
| Keywords: | Consumer Confidence Local Economy |
| Issue Date: | 2022 |
| Abstract: | This paper shows how location-based indicators can inuence consumer condence in India. We capture local economic activity using city-wise night-time luminosity (NTL) data. Using data on unit-level observations on consumer condence from the Consumer Condence Survey (CCS) by the Reserve Bank of India from June 2016 to November 2021, we nd that night-time luminosity positively impacts the perception and future outlook of Indian households. Our results are robust even after controlling for state-wise urban ination. We also nd the dynamic effect of NTL on consumer sentiments. Finally, we extend our study to analyze the impact of NTL on several individual components of household sentiments from the RBI survey, such as household perception and outlook on household income, spending, employment, and general price levels. Overall, our results provide fascinating insights about using NTL as a measure of local economic indicators and its implications on households' sentiment indicators. |
| Description: | Forecast of economic activities plays a pivotal role in the decision-making process of policymakers and market players (Galimberti, 2020). Consumer condence (CC) in the economy is widely recognized as one of the driving forces behind several economic decision-making processes. These sentiments are often measured using perceptions and expectations about the state of the economy. On one hand, CC inuences investment decisions in nancial markets (Jansen & Nahuis, 2003), and on the other hand, it also reects the prevailing animal spirits (Keynes, 1936). According to European Commission (2016), CC is a leading indicator of consumer spending. CC is also often used as a forward-looking indicator of the overall economic environment (Acemoglu & Scott, 1994). Ludvigson (2004) argues that CC is an important source of information about economic activity. Carroll et al. (1994) show that CC can forecast household spending. For instance, Barsky & Sims (2012) use data from Michigan Survey Index and show that the impact of unexpected shocks on responses to questions measuring consumers' condence about future economic conditions can predict the movement of macro variables. Furthermore, Dees (2017) nds that consumer condence shocks are important drivers of real economic activity. |
| URI: | http://localhost:8080/xmlui/handle/123456789/435 |
| Appears in Collections: | PGDM |
Files in This Item:
| File | Description | Size | Format | |
|---|---|---|---|---|
| Anurag Banerjee.pdf | 113.13 kB | Adobe PDF | View/Open |
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