The Effect of Consumer Confidence and Subjective Well-being on Consumers' Spending Behavior.

The paper focuses on the role of consumer confidence and selected well-being measures in aggregate consumption and in subsets of aggregate consumption on a broad set of 22 OECD countries. Consumer confidence played a positive and statistically significant role in the development of expenditures especially on durable and semi-durable goods and services. The increase in cognitive, affective and eudaimonic measures of well-being, measured by the Cantril ladder, positive and negative affect and freedom to make life choices variables, had negative impact on total consumption and expenditures on semi-durable goods and services. Possible explanations for these estimates are provided in the paper. Based on the purpose of expenditure, consumer confidence was a significant determinant of all expenditures except for unavoidable spending such as food, health, housing, water, energy, and fuel. The subjective well-being indicators showed a negative impact on expenditures on clothing and footwear, recreation and culture, and restaurants and hotels. Possible explanations for the positive and negative effects of subjective well-being measures on consumption, benefits of including the freedom of choice variable, and directions for future research regarding the introduction of understudied variables are discussed.

How consumer confidence affects price conscious behavior: The roles of financial vulnerability and locus of control.

Despite their ubiquity in academic and commercial research, evidence of the usefulness of consumer confidence indices is mixed. To contribute to this debate, we examine the psychological mechanisms through which consumer confidence does (and does not) affect consumer behavior. We develop a conceptual model, which we test via structural equation modelling and moderated mediation analysis, using data from a sample of US consumers (n = 1,090). Rather than conceptualize consumer confidence as a single construct, our study is the first to distinguish between national consumer confidence and personal consumer confidence. Consistent with cognitive appraisal theory, personal consumer confidence mediates the relationship between national consumer confidence and perceived financial vulnerability, which in turn leads to increased price conscious behavior. Drawing on attribution theory, we find that external locus of control enhances the effects of national consumer confidence. We provide practical advice to economic forecasters, business analysts, marketers, and financial educators.

Comparing importance and confidence for production and source attributes of seafood among residents and tourists in South Carolina and Florida coastal communities.

The call for environmentally sustainable seafood consumption is growing. Seafood-related behavior is often an outcome of assessing attributes of the product (e.g., taste, freshness, source). To shift consumer (i.e., tourists and residents) preferences toward environmentally sustainable products, many coastal communities of the United States (U.S.) promote production (i.e., Wild-caught, Environmentally sustainable) and source (i.e., Harvested locally, Safe from pollutants) attributes of local seafood. Even if consumers believe these production and source attributes are important, they may lack confidence in their ability to distinguish them when purchasing seafood. Expansion of sustainable coastal mariculture is recommended for food security and enhancing economic resilience of local commercial fisheries, but this newer production attribute (i.e., Farmed in marine waters) adds more complexity to consumer decision-making. Research examining the difference between importance and confidence for seafood attributes is limited. This study surveyed tourists and residents in South Carolina and Florida (U.S.) coastal communities where varying levels of tourism and commercial seafood harvest, including marine farming of shellfish, were occurring. The research measured these consumers' level of importance and confidence for production and source attributes when purchasing seafood in the coastal community. Residents rated importance and confidence higher than tourists for some attributes, but there was no difference between states for tourist or resident subgroups. Both tourists and residents rated confidence lower than importance for all attributes. An Importance-Confidence Analysis (ICA), adapted from Importance-Performance Analysis (IPA), identified attributes needing enhanced marketing and consumer education. The ICA indicated that Environmentally sustainable and Safe from pollutants were high priorities for improving confidence. The low priority rating for Farmed in marine waters was deemed misleading because improved outreach for this attribute could reduce barriers to acceptance and improve recognition.

Consumer confidence in the safety of milk and infant milk formula in China.

A series of food safety incidents related to domestically produced dairy in China harmed consumer confidence and caused a dramatic decrease in dairy consumption from 2008 to 2010. Compared with previous studies that mainly assessed consumer confidence in food or dairy in general, this study focused on 2 specific dairy products, milk and infant milk formula (IMF). Based on data from 934 Chinese consumers, confidence in the safety of milk and IMF was measured by using a multi-item scale with 2 dimensions-optimism and pessimism. We found that Chinese consumers were optimistic about the safety of milk and IMF but, at the same time, were concerned about the risks related to milk and IMF. Chinese consumers have less confidence in IMF than in milk. Structural equation modeling indicated that consumer trust in manufacturers and third parties in the dairy supply chain and confidence in other foods, such as meat and fish, can foster consumer confidence in the safety of milk and IMF, while the extent of recall of the melamine infant formula incident in 2008 and trait worry exert negative effects. In addition, consumers with more children or less family income are likely to be more confident in domestically produced IMF. These insights into consumer confidence and its determinants can assist dairy supply chains and regulatory institutions in formulating effective risk communication strategies to strengthen consumer confidence.

The Great Recession and risk for child abuse and neglect.

This paper examines the association between the Great Recession and four measures of the risk for maternal child abuse and neglect: (1) maternal physical aggression; (2) maternal psychological aggression; (3) physical neglect by mothers; and (4) supervisory/exposure neglect by mothers. It draws on rich longitudinal data from the Fragile Families and Child Wellbeing Study, a longitudinal birth cohort study of families in 20 U.S. cities (N = 3,177; 50% African American, 25% Hispanic; 22% non-Hispanic white; 3% other). The study collected information for the 9-year follow-up survey before, during, and after the Great Recession (2007-2010). Interview dates were linked to two macroeconomic measures of the Great Recession: the national Consumer Sentiment Index and the local unemployment rate. Also included are a wide range of socio-demographic controls, as well as city fixed effects and controls for prior parenting. Results indicate that the Great Recession was associated with increased risk of child abuse but decreased risk of child neglect. Households with social fathers present may have been particularly adversely affected. Results also indicate that economic uncertainty during the Great Recession, as measured by the Consumer Sentiment Index and the unemployment rate, had direct effects on the risk of abuse or neglect, which were not mediated by individual-level measures of economic hardship or poor mental health.

Economic activity and suicides: Causal evidence from macroeconomic shocks in England and Wales.

The relationship between economic activity and suicides has been the subject of much scrutiny, but the focus in the extant literature has been almost exclusively on estimating associations rather than causal effects. In this paper, using data from England and Wales between January 1, 1997 and December 31, 2017, we propose a plausible set of assumptions to estimate the causal impacts of well-known macroeconomic variables on the daily suicide rate. Our identification strategy relies on scheduled macroeconomic announcements and professional economic forecasts. An important advantage of using these variables to model suicide rates is that they can efficiently capture the elements of 'surprise or shock' via the observed difference between how the economy actually performed and how it was expected to perform. Provided that professional forecasts are unbiased and efficient, the estimated 'surprises or shocks' are 'as good as random', and therefore are exogenous. We employ time series regressions and present robust evidence that these exogenous macroeconomic shocks affect the suicide rate. Overall, our results are consistent with economic theory that shocks that reduce estimated permanent income, and therefore expected lifetime utility, can propel suicide rates. Specifically, at the population level, negative shocks to consumer confidence and house prices accelerate the suicide rate. However, there is evidence of behavioural heterogeneity between sexes, states of the economy, and levels of public trust in government. Negative shocks to the retail price index (RPI) raise the suicide rate for males. Negative shocks to the growth rate in gross domestic product (GDP) raise the population suicide rate when the economy is doing poorly. When public trust in government is low, increases in the unemployment rate increase the suicide rate for females.

The impact of agricultural insurance on consumer food safety: empirical evidence from provincial-level data in China.

In the exploration of the efficacy of agricultural subsidy policies, agricultural insurance, as a key element of this policy system, has garnered widespread attention for its potential impact on consumer food safety. This paper delves into the influence of agricultural insurance on the safety of food consumed by individuals, based on provincial panel data in China from 2011 to 2021. The findings indicate that agricultural insurance significantly reduces the incidence of foodborne disease and enhances food safety. Mediating effect tests reveal that agricultural insurance effectively boosts food safety through two key pathways: promoting innovation in agricultural technology and reducing environmental pollution. Moreover, the analysis of moderating effects highlights that increased consumer confidence positively enhances the impact of agricultural insurance. Heterogeneity tests further show that in the provinces with higher levels of agricultural development and stronger government support for agriculture, the role of agricultural insurance in improving food safety is more pronounced. This research not only empirically verifies the effectiveness of agricultural insurance in enhancing food safety but also provides robust theoretical support and practical guidance for the precise formulation and effective implementation of agricultural subsidy policies, particularly agricultural insurance policies, offering significant reference value for policy-makers.

The effect of disinformation about COVID-19 on consumer confidence: Insights from a survey experiment.

Although the COVID-19 pandemic was accompanied by an infodemic about the origin of the virus and effectiveness of vaccines, little is known about the causal effect of this disinformation on the economy. This article fills in this void by examining the effects of disinformation about COVID-19 vaccines on consumer confidence by means of an original survey experiment in Dutch speaking communities of Belgium. Our findings show that the information set that impacts consumer confidence is much broader than previously assumed. We show that disinformation changes the perception of the effectiveness of vaccines which in turn indirectly impacts the future economic outlook, measured by the metric consumer confidence. Moreover, we find that the above effects are larger for respondents exposed to disinformation that is framed as containing 'scientific evidence' compared to 'conspiracy frames'.

Governments' economic support for households during the COVID-19 pandemic and consumer confidence.

To combat the adverse consequences of the COVID-19 pandemic, governments have implemented various economic policies. This study examines how different types of government economic support for households are associated with consumer confidence. Utilizing data from 35 countries in the Organization for Economic Co-operation and Development for January 2020-October 2021 and applying panel fixed effect and system generalized methods of moments regressions, we show that higher levels of government economic support lead to higher levels of consumer confidence. The results also suggest that government income support for households has a stronger impact than debt/contract relief on consumer confidence during the pandemic in the full sample. Moreover, we find that debt/contract relief is a more effective policy to boost confidence in emerging economies. Finally, COVID-19 fatalities have a significant negative effect on consumer confidence.

Perception versus reality of the COVID-19 pandemic in U.S. meat markets.

Disruptions to meat markets during the COVID-19 pandemic spurred mass media attention. While media deeming the U.S. food system 'broken' garnered a great deal of attention, the actual production and meat availability data does not support this conclusion. The U.S. meat supply chain, while certainly strained and with measurable consequence during periods of adjustment, proved ultimately resilient and rebounded quickly. Increased attention on meat supply chains may drive continued efforts to improve resiliency, but analyses of online media and U.S. production and cold storage data do not support a narrative that the system 'broke', but was perhaps 'strained' and 'responded efficiently'. Findings indicate that public sentiment about U.S. meat supply overall was not as dominated by pandemic-era concerns as may be hypothesized.

Macroeconomic dynamics under bounded rationality: on the impact of consumers' forecast heuristics.

This paper considers various types of forecast heuristics to examine the effects of boundedly rational agents on macroeconomic dynamics. Given the baseline New Keynesian model, we seek to find the expectation formation process that is most suitable in describing economic adjustments over the business cycle. In particular, impulse response analysis is used to compare the performances of the macroeconomic model under bounded rationality and under rational expectations. The results show that the fluctuations in consumer confidence mainly explain the degree of persistence in consumption. We conclude that a model under bounded rationality with a heuristic-induced switching process can qualitatively provide a good fit to the data that is equivalent to a model under rational expectations.

A simple macro-model of COVID-19 with special reference to India.

Motivated by the prevailing severe situation in India, we extend the SIR(S) model of infectious diseases to incorporate demand dynamics and its interaction with COVID-19 spread. We argue that, on one hand, the spread of COVID-19 creates panic among consumers and firms and negatively affects economic activity. On the other hand, economic activity intensifies the spread of the infection. Initially assuming that recovered individuals do not develop antibodies and become susceptible again, we capture the interaction between economic activity and the spread of the disease in a two-dimensional dynamical system. We show that a large fiscal expansion combined with measures to boost community health and improve the health sector's capacity to provide critical care can simultaneously improve the economy and control the spread of the disease. Finally, assuming that only a fraction of recovered individuals become susceptible to contracting the diseases again, we obtain richer dynamics in a three-dimensional dynamical system. This paper also highlights the important role of infection rates and the recovery rate in determining the uniqueness and the stability properties of steady state.

The causal nexus of geopolitical risks, consumer and producer confidence indexes: evidence from selected economies.

The effect and significant of risk in every real life situation is increasingly becoming a pertinent subject in almost every field, thus causing potential adverse effects on both the individual's propensity to consume and invest. Also, the likelihood of the exposure of the developing countries to geopolitical risks amid experience of economic fragilities as indicated by security indexes has remained an important driver of the global market dynamics. On this note, this study is aimed at examining whether related risks in selected economies (Brazil, Indonesia, Republic of Korea, Russia, China, South Africa, Mexico, and Turkey) with geopolitical risks have a significant effect on consumer and producer confidence indexes by employing a monthly data between January 2004 and June 2018. A combination of two panel causality tecniques that examined both the panel and country-specific causality were employed to examine both the panel causal relationship and the country-specific causal relationship. The study found a causality relationship from geopolitical risk index to the consumer and producer confidence index for the overall panel. Also, the results in terms of the individual country showed that causality from the geopolitical risk index to the consumer confidence index is valid for Indonesia, South Africa, and Mexico. Meanwhile, the causality from geopolitical risk index to producer confidence index is valid for China, Indonesia, South Korea, and Mexico. The study presented useful financial and securtity policy measure for the examined panel of selected countries.

Do pandemics have an asymmetric effect on tourism in Italy?

In this study, the asymmetric Granger causality relationship between tourist arrivals and world pandemic uncertainty index is examined by controlling inflation, consumer confidence index, and industrial production for the period 2000M1 and 2020M1 in Italy. To the best of our knowledge, the current study is one of the few studies to investigate the relationship between tourist arrivals and world pandemic uncertainty in an asymmetric framework. The empirical results show that using the Granger causality test in a linear framework causes bias results due to misspecification. Therefore, the study relies on asymmetric Granger causality test results which reveal that the positive shock of world pandemic uncertainty Granger causes a negative shock of tourist arrivals. It is suggested that international tourist arrivals are sensitive to external shocks such as pandemics and in such instances the government of the concerned country can insulate the tourism-service and hospitality industry against the shocks by developing strategies to promote full information between all stakeholders.

Korean consumers' perceptions of health/functional food claims according to the strength of scientific evidence.

In this study, we investigated that consumers could differentiate between levels of claims and clarify how a visual aid influences consumer understanding of the different claim levels. We interviewed 2,000 consumers in 13 shopping malls on their perception of and confidence in different levels of health claims using seven point scales. The average confidence scores given by participants were 4.17 for the probable level and 4.07 for the possible level; the score for the probable level was significantly higher than that for the possible level (P < 0.05). Scores for confidence in claims after reading labels with and without a visual aid were 5.27 and 4.43, respectively; the score for labeling with a visual aid was significantly higher than for labeling without a visual aid (P < 0.01). Our results provide compelling evidence that providing health claims with qualifying language differentiating levels of scientific evidence can help consumers understand the strength of scientific evidence behind those claims. Moreover, when a visual aid was included, consumers perceived the scientific levels more clearly and had greater confidence in their meanings than when a visual aid was not included. Although this result suggests that consumers react differently to different claim levels, it is not yet clear whether consumers understand the variations in the degree of scientific support.