Friday, August 12, 2011

Consumer confidence by voting intention - I've made a graph



Thank you Michael Chua of the Melbourne Institute.


WHAT THE NUMBERS ON THE LEFT HAND SIDE MEAN

Each month the Melbourne Institute asks five questions:

. Family finances vs a year ago: better or worse?

. Family finances next 12 months: better or worse?

. Economic conditions next 12 months: better or worse?

. Economic conditions next 5 years: better or worse?

. Good or bad time to buy major household items?


For each question it subtracts the per cent who say worse/bad from the percentage who say better/good. It then adds 100.

The result gives an index number which is greater than 100 if there are more optimists than pessimists, less than 100 if there are more pessimists than optimists.

The overall index is an average of the five index numbers.

This means the more pessimistic the responses, the lower the index number.

Any result above 100 means optimists outweigh pessimists.


Related Posts

. Confidence is how low?

. We're confident. Not.

. We don't know how the carbon tax will work, so we're scared

. First floods, now carbon tax. Confidence on the floor


CSI 1364.0.15.001

7 comments:

Anonymous said...

I'm not quite up to par with the digram. Could you attach a little blurb to make it a little clearer for me.

Marek said...

Be interesting to see this combined with voting intentions.

The Lorax said...

The red line represents a much smaller proportion of the population than the blue line.

Confidence absolutely smashed to GFC levels amongst the majority of voters.

Some boom we're having!

Anonymous said...

Or pre-GFC levels.

You could also say that things are no worse than they were in the second half of 2006 (parties reversed).

Does that make it meaningful or meaningless?

I guess it implies a change in government at the next election. Great. The coalition gets to impose their "magic pudding" theory of the economy again.

TP

Doug said...

What it means is that if you are politically opposed to the Government, whichever party is in power, you will be less confident about the economy. It doesn't necessarily connect to anything that is actually happening in the economy.

In other words even if you are doing well you will be less confident about the economic future if you are opposed to the party that is in power.

It is a triumph of perception over reality.

Anonymous said...

Err, Doug no - a less self serving interpretation would be that the majority sentiment reflects perceived future economic performance which reflects voting intention.

Will our media 'pundits' understand this - No.

Anonymous said...

Amazing, the two lines more or less move in-line.

Voters who have their man (or women) in the lodge are more optimistic than those who voted for the other guy.

Whenever their is a change in leadership, the lines cross-over.

Nice diagram Peter!

Unfortunately for retailers people seem to be moving from the purple line to blue line.

Earlier people were blaming Tony Abbott for talking down the economy.

The question: is opposition popularity a leading or lagging indicator or consumer confidence?

Post a Comment

COMMENTS ARE CLOSED