(DOCFRADIS 1802) Does Aggregate Buyer Satisfaction affect Household Consumption Growth?

Abstract:

This study finds that measures of the University of Michigan’s American Customer Satisfaction Index are related to Personal Consumption Growth, controlling for typical predictors that are commonly included in the Index of Leading Indicators.  In assessing the relationship, this study uses a Bayesian mean-variance regression that addresses problems of small sample sizes and non-normal distributions by considering both parameter and distributional uncertainty in a semi-parametric framework. Importantly, this paper introduces a new psychometric measure to assess consumer satisfaction; variants of this measure are gaining acceptance in the private and public sectors in Scandinavia, China, Japan, Korea, the United States and in other countries.