Monday, October 11, 2010: 2:35 PM
In general a consumer confidence index of one country helps to analyze the general economic outlook by acting as a leading economic indicator for several macroeconomic variables. Nevertheless, within countries the results of consumer confidence surveys could vary like regional economic differences. Especially during the crises times, the rural and urban regions should be asymmetrically affected. To compare the response of rural and urban regions of an emerging market, this paper examines the behavior of the CNBC-e Consumer Confidence Index in Turkey during 2002 July - 2010 March period with special emphasis on the recent crisis period. We calculate the rural and urban consumer confidence indices by employing the micro level data from the survey provider. We find that the urban region’s consumer confidence worsens more than of the rural at the beginning of the crisis. However, during the crisis the confidence of urban region improves significantly larger than of the rural region. The difference between the two regions’ indices reveals that changes in consumer confidence of Turkish households do not follow a symmetric pattern throughout the country, and that there is the need to assess regional indices as well as the aggregate index.