Testing changes in consumer confidence indicators

The authors propose a statistical methodology to test changes in consumer confidence indicators. These indicators are surveyed monthly and each time concern di®erent individuals. This complicates a straightforward interpretation of changes in the values of the index. The proposed methodology involves estimating the transition matrix which connects the fractions of positive, neutral and negative opinions. The elements of this matrix can be estimated and confidence bounds can be computed. A by-product of the method is a simple tool to correct for seasonality. An illustration to about two decades of Dutch data shows that monthly changes in consumer confidence are not often significantly different from zero.