TÜKETİM FONKSİYONU VE TÜKETİCİ GÜVEN ENDEKSİ
CONSUMPTION FUNCTION AND CONSUMER CONFIDENCE INDEX

Summary/Abstract: The consumer confidence index is a variable which has been generally ignored in both traditional consumption theories and applied literature in explaining the consumption function. However, consumer confidence index contains significant information about not only current and future economic actions of consumers but also their saving and consumption propensities. In this respect, the purpose of the present study is to reveal the effect of the consumer confidence index, which is generally not included in the consumption functions, in both short and long terms in contrast to many studies. Two different models were estimated for this purpose. In the first model, the consumer confidence index was excluded while the second model was included in the right side of the function as an explanatory variable. Short and long term dynamics were obtained by using ARDL boundary test approach. Data set used in the study for 2004: Q1-2018: Q3 period consists of real income, interest rate, inflation, real consumption expenditures and consumer confidence index. According to the findings, consumer confidence index is an important leading indicator in the information set that can explain household consumption expenditures in both short and long term.

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