Consumer Confidence Index: Concepts and Calculation Method in Iran

Abstract
Nowadays, the study of leading economic indicators holds significant importance. These indicators assist governments and private sector decision-makers in better evaluating their performance and planning future activities. In recent years, several countries have turned to survey-based indexing to improve their economic indicator systems. Among these indicators is the Consumer Confidence Index (CCI), which measures consumers’ optimism regarding the overall state of the economy and their personal financial situation. This index is derived from a combination of two sub-indices: the Current Economic Conditions Index (CECI) and the Consumer Expectations Index (CEI), both based on consumer surveys. Opinions about current conditions account for 40% of the index, while expectations about future conditions make up the remaining 60%. The Consumer Confidence Index is based on the idea that when consumers are optimistic about the future, they are more likely to spend in the present, thereby stimulating the economy. Conversely, when consumers are pessimistic, they tend to save more, which can lead to economic slowdown. In addition to interpreting household views on future economic conditions, the CCI helps producers, investors, and policymakers anticipate and adapt to changes in household consumption and saving patterns. This index is currently calculated and published in most countries around the world.
Given the importance and wide applicability of the Consumer Confidence Index, the Research Center of the Islamic Consultative Assembly (Parliament of Iran) began conducting economic sentiment surveys in autumn 2021 to calculate this index in Iran. The related concepts and calculation methodology are discussed in detail in the present report.
Subjects

[1]Gintis, H. (2000), Beyond homo economicus: Evidence from experimental economics. Ecological Economics, 311-322.
[2]Demirel, Selim Koray, and Seyfettin Artan. 2017. “The Causality Relationships between Economic Confidence and
Fundamental Macroeconomic Indicators : Empirical Evidence from Selected European Union Countries” 417–24.
[3] Torniainen, Sami, and P O Box. 2020. “Do Big Data Preddict Consumer Confidence ? An Empirical Study with the
Finnish Consumer Confidence Indicator and Google Searches Master ’ s Thesis Aalto University School of Business
Economics.“
[4]Katona, G. (1951), Psychological Analysis of Economic Behavior. New York: McGraw-Hill Book Company, Inc.
[5] Akerlof, G.A., Shiller, R.J. (2010), Hayvansal Güdüler (Animal Spirits). In: Domaniç, N., Konyar, L., editors. 1st ed.
İstanbul: Scala Publishing.
[6]Katona, G. (1968), Consumer behavior: Theory and findings on expectations and aspirations. The American Economic
Review, 19-30.
[7]Soulas, F. and Langer, G. (1994). “Changes in Clinton’s Approval Rating.” Paper presented at the annual conference
of the American Association for Public Opinion Research, Danvers, MA, 11-15.
[8]Warneryd, K.-E. (1982). The life and work of George Katona. Journal of Economic Psychology, 1-31.
[9]Curtin, R. (1982), Indicators of Consumer Behavior: The University of Michigan Surveys of Consumers, Public Opinion
Quarterly, 340-352.
[10] Mielcová, Elena. 2017. “Is Connsumer Confidence Index a Suitable Predictor of Future Economic Growth ? an
Evidence From The USA.”
[11]CHENG, YAO. 2020. “The Determinants , Implications and Interaction of Consumer Sentiment Yao Cheng PhD in
Finance.” Durham University.
[12]Chinelo, Jane-Vivian, and Ezinne Igboayaka. 2015. “Using Social Media Networks for Measuring Consumer Confidence: Problems, Issues and Prospects.”
[13]Merkle, Daniel M, Gary E Langer, and Dalia Sussman. 2003. Consumer Confidence: Measurement and Meaning.
Paper Presented at the Annual Conference of the American Association for Public Opinion Research, Nashville, Tennessee, 15-18.
[14]Duch, R. N., Palmer, H. D., & Anderson, C. J. (2000). Heterogeneity in perceptions of national economic conditions.
American Journal of Political Science, 635-652.
[15]Curtin, R. T. (2000). Psychology and macroeconomics: Fifty years of the surveys of consumers. In J. House, T.
[16]Ludvigson, S. C. (2004). Consumer confidence and consumer spending. Journal of Economic Perspectives, 29-50.
[17]Blaz Mateljic. (2012).” Can cultural differences divide Europe into different regions and what implications would this
have on consumers sentiment within the regions?”
[18]DeLisle, J. (2008). “The Three C’s of Our Disconnect: Credit,Confidence, and Collateral.” Appraisal Journal, 301-312.
[19]Ball, L. and Cecchetti, S.G. (1990), ‘Inflation and uncertainty at short and long horizons’, Brookings Papers on Economic Activity, 215–254.
[20]Dion, D.,(2006). “Does Consumer Confidence Forecast Household Spending?,” MPRA Paper 902, University Library
of Munich, Germany.
[21]Katona, G.(1975) Psychological economics. New York: American Elsevier