ESRI Research Seminar: "Two New Survey Questions for Better Prediction of Turning Points in the Business Cycle"

ESRI Research Seminar: "Two New Survey Questions for Better Prediction of Turning Points in the Business Cycle"

Venue: ESRI, Whitaker Square, Sir John Rogerson's Quay, Dublin 2
Date: TUESDAY 4/12/2012
Time: 4 p.m.
Speaker: Dr. David Comerford, Stirling University.

Abstract: The consumer sentiment index (CS) has been shown to predict macroeconomic outcomes, above and beyond what can be predicted using other economic indicators. The current research suggests a simple means to increase the predictive power of CS. CS is derived from survey questions in the directform: "Will the economy be better or worse next year than it is today?". The authors propose an alternative implied format that asks respondents to "Rate the economy today" and to "Rate how you think the economy will be next year". Though logically equivalent, the implied format and the direct format yield trends that differ strikingly. The authors document that this discrepancy stems from response bias and present evidence that CS would be more informative if it were measured by the implied format.

Biography: David Comerford is a lecturer at Stirling Management School. His research is motivated by the goal to improve decision making by correcting for biases in judgment. As well as this project on perception of change over time, he has ongoing research streams in forecasts of hedonic utility (Journal of Economic Psychology; Patient Education and Counseling) and in perceptions of expenditure (Fiscal Studies). He was a 2010 Fulbright Scholar and an IRCHSS PhD fellow. He holds a PhD in Economics from University College Dublin and was a postdoctoral fellow at Duke University’s Fuqua School of Business.

All welcome, no booking required.