Management Summary Research Study „Consumer confidence: economic fundamentals and noise, or more than that? A case of EU countries“

This paper contributes to the discussion about the nature of the variability of consumer confidence that is unexplained by economic variables. This unexplained part of consumer confidence is understood as either a reflection of animal spirits or a mere result of changing expectations. In either case, the interpretation assumes that it reflects irrationality on the part of consumers. This study shows on a panel of EU countries that an additional part of consumer confidence may be explained by cognitive factors and, to a lesser degree, by emotional factors and perception of risk. The discussion shows that none of these additional influences should be a priori interpreted as a sign of irrationality. Therefore, based on its own results and the results of other empirical and theoretical papers, the study concludes that the interpretation of the variability of consumer confidence not explained by economic fundamentals as a reflection of irrationality, still prevailing in the field of economics, is false.

Target groups of stakeholders: researchers in economics

Citation: Pošta, V. Consumer confidence: economic fundamentals and noise, or more than that? A case of EU countries. J Econ Interact Coord (2025). https://doi.org/10.1007/s11403-025-00460-4

Source: https://link.springer.com/article/10.1007/s11403-025-00460-4