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Consumers Confidence and Households Consumption in Brazil: Evidence from the FGV Survey

Author

Listed:
  • Aloisio Campelo

    (Instituto Brasileiro de Economia)

  • Viviane Seda Bittencourt

    (Instituto Brasileiro de Economia)

  • Marco Malgarini

    (Italian National Agency for the Evaluation of Universities and Research Institutes (ANVUR))

Abstract

The deterioration of Consumer Confidence has been considered an important driver of the recent financial crisis. However, empirical evidence on the relationship between confidence and household consumption is often inconclusive; in many cases, available analysis does not seem to confirm that confidence is able to predict expenditures once the role of economic fundamentals has been accounted for. Nevertheless, generally speaking, most of the literature refers to the most advanced economies of Europe and the USA, while evidence for emerging economies remains scarce. The main aim of this paper is to fill this gap for Brazil, looking at Consumer Survey data published by the Fundação Getulio Vargas since 2005, and studying its relationship with Brazilian consumption expenditures. According to the results, the overall Consumer Confidence Index and the Present Situation Index are good predictors of consumption, helping to improve the goodness of fit of consumer spending forecasting models. We also show that in Brazil a positive shock to confidence has a positive and significant impact on consumption for at least three quarters, a finding similar to those for more industrialized countries.

Suggested Citation

  • Aloisio Campelo & Viviane Seda Bittencourt & Marco Malgarini, 2020. "Consumers Confidence and Households Consumption in Brazil: Evidence from the FGV Survey," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 16(1), pages 19-34, April.
    • Handle: RePEc:spr:jbuscr:v:16:y:2020:i:1:d:10.1007_s41549-020-00042-2
    DOI: 10.1007/s41549-020-00042-2
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    References listed on IDEAS

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    2. Hindls Richard & Marek Lubos & Hronová Stanislava, 2022. "Changes in the structure of household disposable income in selected countries as a reflection of crises after 2000," Statistics in Transition New Series, Polish Statistical Association, vol. 23(4), pages 1-19, December.
    3. Lenka Mynaříková & Vít Pošta, 2023. "The Effect of Consumer Confidence and Subjective Well-being on Consumers’ Spending Behavior," Journal of Happiness Studies, Springer, vol. 24(2), pages 429-453, February.
    4. Juan G Brida & Bibiana Lanzilotta & Lucia I Rosich, 2021. "On the empirical relations between producers expectations and economic growth," Economics Bulletin, AccessEcon, vol. 41(3), pages 1970-1982.
    5. Richard T. Curtin, 2022. "A New Theory of Expectations," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 18(3), pages 239-259, November.

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    More about this item

    Keywords

    Consumer confidence; Household consumption expenditures; Survey data; Brazil; VAR models;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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