A performance check of consumer sentiment indices in Poland

There are a variety of consumer surveys in Poland and currently there are four institutions which are conducting consumer tendency surveys. These are the Research Institute for Economic Development (RIED) that has been conducting quarterly survey since 1990, Ipsos which has been conducting monthly surveys since December 1991, CSU that has been conducting monthly surveys since 2004 (quarterly surveys since the second quarter of 1997) and GfK Polonia that has been conducting monthly surveys since May 2001. In this sense, Poland is probably the only country in the world with so many consumer sentiment surveys. However, one should be skeptical on the issue of whether each index has the information content for the future path of economic growth. Dudek (2008) examines the RIED data in order to test whether this data set forecasts real private consumption expenditures in Poland in the short term and concludes in its favor. We would like to take his study further by examining the relationship between the remaining consumer confidence measures and industrial production and retail sales in Poland as a proxy for economic growth. The empirical analysis uses the Breitung and Candelon (2006) test which enhances the Granger causality time domain methodology into a frequency domain. This method is superior to Granger causality as it does not demand that the variables are supposed to have no unit root. Moreover, the frequency domain analysis considers all maturities rather than relying on a lag selection procedure so the statistical significance is measured in short, medium and long terms simultaneously. Our preliminary results show that some of the consumer sentiment surveys perform better than others in predicting the future path of the economy.