CONSUMER CONFIDENCE AND ECONOMIC FLUCTUATIONS

If consumers become pessimistic about the state of the economy, can there be a slowdown in output, even if their pessimism is not based on economic fundamentals? Recent macroeconomic models show the answer is yes, if there are “strategic complementarities” and multiple equilibria. We investigate the link between consumer confidence and economic fluctuations using vector autoregressions. In all models, after controlling for economic fundamentals, the hypothesis that consumer sentiment does not cause GNP (in the Granger sense) can be rejected. Variance decompositions suggest that consumer sentiment accounts for between 13 and 26 percent of the innovation variance of GNP.     

An expectational view of consumer spending prospects

While the path of the economy clearly depends on a lot more than the behavior of consumers, the latter is surely one of the key influences on the former. After all, consumer spending counts for about two-thirds of the total (more if consumer investments in owner-occupied housing are included), and postwar business cycle movements in the U.S. have typically been foreshadowed by significant changes in consumer spending, particularly for automobiles and houses. Thus, whether the economy will be proceeding along at reasonably satisfactory growth rates, sliding into recession, or accelerating into renewed expansion will be heavily influenced by what consumers do.     

CONSUMPTION,SENTIMENT, AND ECONOMIC NEWS

This paper investigates the influence of economic news on consumer sentiment, and examines whether “news shocks”—changes in coverage that would not be expected from incoming data on economic fundamentals—have aggregate effects. Using monthly U.S. data and a structural vector autoregression, I find that (1) sentiment is affected by news shocks; (2) after filtering out effects of news shocks, shocks to sentiment still have positive effects on consumer spending; and (3) news shocks influence both spending and unemployment in significant, though transitory ways. These results are consistent with other evidence of a role of nonfundamental factors in aggregate fluctuations. (JEL E21, E32, D12)     

Research on Consumer Well-Being in Malaysia

This research note provides an overview of consumer well-being research in Malaysia, and highlights a major research study on consumer well-being by Masud et al. (2010). Masud et al.??s data indicate that Malaysian consumers enjoyed their rights as consumers, held some level of acceptable consumer values, possessed reasonable levels of knowledge, and practiced good consumer principles. Nevertheless, some consumers indicated a low level of overall well-being. The data also revealed the need for strong support from government and market sectors to enhance the well-being of consumers in Malaysia. More studies on consumer well-being in Malaysia are suggested and universities and research institutes are urged to intensify their efforts to convince policy makers and grant providers to appropriate funds for research on consumer well-being in Malaysia.     

Responses to Economic Pressure by Low-Income Families: Financial Distress and Hopefulness

Based on Boss’ family stress model, the study examined whether financial adaptations and locus of control mediated levels of financial distress and hopefulness for low-income consumers experiencing economic pressure. Data were collected online from 221 low-income, Midwestern consumers. Structural equation modeling explored relationships. Those reporting more economic pressure reported higher financial distress, less hopefulness. When locus of control was more internal, however, participants reported less financial distress and more hopefulness. Those making more financial adjustments had more financial distress, but also more hopefulness, indicating that while the current situation was grim, adaptive responses fostered hopefulness that things would improve. Educators can emphasize financial behaviors that improve financial outcomes, facilitating greater perceived control over finances, more hopefulness, and reduced financial distress.     

Lay actions in the face of crisis—Swedish citizens’ actions in response to the global financial crisis of 2008

This study goes beyond attitudes and behavioral indications as response to risk perceptions and focuses on actual behavior of laypeople. We report the results from a survey, conducted among a sample of Swedish citizens in the spring of 2009, looking at lay actions as responses to the financial crisis of 2008.In total, 3138 respondents were asked whether they had done something to protect their money during the recent financial crisis or not. The total sample, 1053 respondents, was divided into two comparable groups and a binary logistic regression tested a model with nine factors hypothesized to be predicting the choice to act or not as a response to the financial crisis. Among the eight factors predicting likelihood to act were gender, age, education, ethnicity, possession of assets affected of the financial crisis, worrying about the everyday household finances, the perception of others’ actions, and importance put on being knowledgeable and up-dated about financial matters. The ninth factor—respondents’ perception of the crisis to be a greater threat to the U.S. and global economy than to their own personal finances—did not contribute significantly to the model.A second aim of the study was to determine whether any individuals acted rashly and, if so, whether this group differed in any statistically significant way from the group of individuals that acted in a more financially circumspectly manner. In the group of individuals that acted rashly there is a higher propensity of: individuals who do not think they have assets affected by the crisis: individuals who have a lower level of education; and individuals who consider it important to be knowledgeable and up-to-date about financial matters. It should be of interest to policymakers and researchers to further explore features of this group of laypeople because it is the most important target group for consumer information and protection.     

Effects of goal-striving stress on the mental health of black Americans

Although many scholars have theorized about how responding to the stress of blocked opportunities can affect the well-being of black Americans, few scholars have empirically examined the relationships between striving efforts, personal goals, and mental health among black Americans. This investigation examines the relationship between goal-striving stress and mental health in a national sample of black Americans. Results indicate that goal-striving stress is significantly related to lower levels of happiness, life satisfaction, self-esteem, and higher levels of psychological distress. We find that poverty status moderates the relationship between goal-striving stress and mental health. Compared to poorer persons, individuals above poverty with high goal-striving stress have significantly lower levels of happiness and life satisfaction. Overall, the findings provide a more complete context for understanding associations among socioeconomic status, goal-striving stress, and adverse mental health outcomes among black Americans.     

Volunteer work and well-being

Using two waves of panel data from Americans' Changing Lives (House 1995) (N = 2,681), we examine the relationships between volunteer work in the community and six aspects of personal well-being: happiness, life satisfaction, self-esteem, sense of control over life, physical health, and depression. Prior research has more often examined the effects of voluntary memberships than of volunteer work, has used cross-sectional rather than longitudinal data, and, when longitudinal, has emphasized social causation over selection effects. Focusing only on the consequences of volunteer work overlooks the antecedents of human agency. People with greater personality resources and better physical and mental health should be more likely to seek (or to be sought for) community service. Hence, we examine both selection and social causation effects. Results show that volunteer work indeed enhances all six aspects of well-being and, conversely, people who have greater well-being invest more hours in volunteer service. Given this, further understanding of self- versus social-selection processes seems an important next step. Do positive, healthy people actively seek out volunteer opportunities, or do organizations actively recruit individuals of these types (or both)? Explaining how positive consequences flow from volunteer service may offer a useful counterpoint to stress theory, which has focused primarily on negative life experiences and their sequelae.     

X-inefficiency in the use of income to attain economic satisfaction

This investigation uses a subjective well-being approach to provide a novel empirical answer to an old normative debate in economic literature: whether consumers use efficiently their income. Based on a large database from Mexico, the paper shows that there exists substantial X-inefficiency in the use of income; even when a relaxed criterion to define the thick frontier is followed. X-inefficiency in the use of income can emerge from personal errors and from social-organization deficiencies. Sustainable development concerns make it critical to focus on reducing X-inefficiency as an alternative way to increase economic well-being.     

Consumer possessions,consumer passions,and subjective well-being

Speculation about the linkages between consumer products, consumption-related attitudes, and subjective well-being is prominent in the social sciences. This paper examines three issues in this literature using data collected in 1989 and 1990. The first issue is whether the accumulation and anticipated accumulation of different types of consumer goods foster subjective well-being. Second is whether accumulation and anticipated accumulation explain the well-established relationship between income and subjective well-being. These issues are explored with two alternative measures that incorporate different assumptions about the relative importance of ownership and the newness of products. The third issue is whether passions for the new are positively or negatively related to subjective well-being. Although some results indicate that the heavy theoretical emphasis on the importance of consumer markets for subjective well-being and the income-subjective well-being relationship is overdrawn, others provide weak support for a market-centric perspective that emphasizes the positive consequences of accumulating different types of consumer goods. Different types of consumer goods fill different niches in individuals' lives as they age. Lastly, the passion for new experiences in the marketplace is positively related to subjective well-being.     

What Helped Nonprofits Weather the Great Recession?

This study examined the effectiveness of several financial strategies for nonprofit organizations in fighting the Great Recession. Using data from human services and community improvement organizations in the state of New Jersey, we tested hypotheses about the relationships between three measures of financial sustainability and various fundraising efforts and financial indicators. We found that (1) except for strong external funding relationships, funding efforts were generally not effective in enhancing financial sustainability during the crisis; (2) higher operating margin and equity ratio improved an organization's ability to generate revenue and maintain expense levels, but higher debt ratio and administrative cost ratio were generally harmful; and (3) revenue diversification might aggravate fiscal stress and cause more expense cuts in a severe crisis. These findings improve our understanding of the mechanics of nonprofit management during times of harsh fiscal conditions and suggest useful ways for nonprofit organizations to navigate future financial crises.     

The Effects of Resources, Decision Making, and Decision Implementing on Perceived Family Well-Being in Adjusting to an Economic Stressor

This article examines the relationships of personal resources, decision-making, and decision-implementing behaviors that were measured in time one with perceived family well-being that was measured one year later. The sample included 323 farm men and women who had experienced the same economic stressor event. A structural equation model was posited based upon the theoretical frameworks of family resource management. The results indicated the theoretical model fit the data well for both men and women. LISREL analyses revealed strong positive relationships among perceived financial and emotional resources, decision making, and perceived family well-being. A positive relationship was found between decision making and decision implementing, but no relationship was found between decision implementing and perceived family well-being. Gender differences were present only in the measurement model among the indicators of decision implementing and family well-being.     

Two Sides of the Same Coin? The Differing Roles of Assets and Consumer Debt in Marriage

This study examines whether assets and consumer debts relate to change in marital satisfaction and conflict in opposing ways or in independent ways. It also tests whether these relationships are direct or mediated. Using a nationally representative longitudinal sample, the results indicate that assets and consumer debt influence change in marital outcomes in mostly independent rather than complementary ways. Consistent with prior literature, assets work indirectly by decreasing feelings of economic pressure. Consumer debt, however, directly predicts changes in marital conflict, even after controlling for variables in the family stress model. Debts also act indirectly by decreasing depression once economic pressure is included in the model. This unexpected suppressor effect suggests that the meaning of debts may not be straightforward.     

The Impact of Economic Freedom and Personal Freedom on Net In-Migration in the U.S.: A State-Level Empirical Analysis, 2000 to 2010

Arguably, private enterprise flourishes under conditions of increased freedom. However, increases in economic freedom can sometimes impose costs on others (negative externalities and monopoly power being prominent examples). Nevertheless, on balance, it is typically expected that the greater the degree of economic freedom, the more successfully and efficiently markets perform and the greater the prosperity created through private enterprise. These net outcomes from greater freedom accelerate economic growth and development, which in turn creates opportunities for yet further success. From a different perspective, it can be argued that greater personal freedom promotes higher levels of utility for consumers in non-economic ways. Accordingly, the present study empirically investigates whether the prospects of greater economic freedom and/or greater personal freedom in any given state vis-à-vis other states act(s) to induce a greater net influx of migrants. This empirical study of internal U.S. migration over the study period from 2000 to 2010 finds clear evidence that migrants prefer to move to those states with greater economic freedom on the one hand and greater personal freedom on the other hand.     

The influence of negative newspaper coverage on consumer confidence: The Dutch case

This paper studies the empirical relationship between the real economy, consumer confidence and economic news coverage in national newspapers for the Netherlands during the period 1990-2009. Media-attention for economic developments is associated with consumer confidence, with more negative news decreasing consumer confidence; this result holds after controlling for the real economy (stock-market). The relationship differs for different business-cycles. The effect is in particular stronger for the months following the beginning of the credit-crisis. This suggests that in line with many popular concerns negative news is among factors influencing the hardness of the landing of the current credit-crisis.     

My home, your workplace: people with physical disability negotiate their sexual health without crossing professional boundaries

This paper aims to describe research that examined the views of people with physical disability, living in Australia, of their sexual well-being needs from their own perspective. We explored the impact their sexual well-being needs had on their relationships with professional carers. A social model of disability was used to understand how sexual well-being is facilitated or denied in community care. We also explored whether clients' sexual well-being needs could be met without carers or clients 'crossing the line'. Our findings indicate the multiple ways that 'professional boundaries' were negotiated between clients and professional carers. The data show that the location of the 'line' changed, depending on a range of personal, social, economic and environmental factors. The data also show a gap between the sexual well-being needs of people living with a physical disability and the level of support provided at the social and organisational levels. Suggestions are made for research and practice directions.     

Merry Christmas and Happy New Year! The impact of Christmas rituals on subjective well-being and family's emotional climate

Abstract

This study assessed subjective well-being before and after Christmas and New Year holidays. In contradiction to lay beliefs about these holidays, stress and conflict caused by its experience was weak, while participation in rituals was high and satisfactory, and positive emotions were dominant. High frequency of participation in ritualised family celebrations increased positive well-being: satisfaction with life, perceived social well-being, and the balance of affective well-being. Satisfaction with rituals had an impact on positive affect, satisfaction with life and positive family climate, while participation frequency was more relevant for social support and lower loneliness level. Conflict experienced during Christmas increased negative affect and negative emotional family climate, while it undermined positive affect, satisfaction with life and social well-being.     

Political Beliefs in an Era of Economic Decline: Farmers' Attitudes Toward State Economic Intervention,Trade, and Food Security1

Abstract The effects of the economy on political attitudes is a longstanding sociological issue that is receiving renewed attention in the face of recent U.S. economic downturns. While the impacts of the farm crisis on financial and household well-being of farm operators have been addressed by a number of studies, few have explored its political outcomes. Four perspectives that consider how economic forces translate into political beliefs are outlined, two reflecting objective economic position (class location and financial pressure) and two indicating subjective appraisals (feelings of economic uncertainty and subjective deprivation). Data from a sample of Ohio farm operators for 1987 are used to analyze how the perspectives are related to progressive beliefs about farming, the domestic nonfarm economy, and third-world food production. Indicators of objective economic position and subjective appraisals have relatively limited impact on farmers' political attitudes. Of these indicators, subjective appraisals were more closely related to attitudes. In addition, operators' stances on farm political issues also affect their views on domestic nonfarm and third-world policy agendas. Implications were found for studies of farmers' political attitudes as well as for broader sociological theory regarding the development of progressive attitudes during periods of economic decline.     

The ant and the grasshopper revisited: The present psychological benefits of saving and future oriented financial behaviors

This study examines the impact of saving and future-oriented financial behaviors on young adults’ well-being. Using two-timed longitudinal data (N = 748) collected both prior to and during the economic crisis, we tested and confirmed a psychological process model (i.e., financial attitude → behavioral intention → actual behavior → well-being), one that included parental norms, perceived behavioral control and financial planning horizon as antecedent factors. Our findings indicate that the more positive a young adult’s attitude toward financial behaviors, and the greater his/her perception of parental expectations, then the stronger will be this young adult’s intention to perform such behaviors. We found that behavioral intention at Time 1 contributed to actual financial behaviors at Time 2, which in turn was positively related to a young adult’s present sense of well-being. We also found that perceived behavioral control and financial planning horizon influenced both behavioral intention and actual behavior. Although perceived impact of the economic crisis moderated the link between past and present well-being, it did not affect the hierarchical flow of the model. We discuss the theoretical and practical implications of our study pertaining to consumer financial education.     

The United States Economic Crisis: Young Adults’ Reports of Economic Pressures, Financial and Religious Coping and Psychological Well-Being

Using a sample of 222 young adults attending college, the present study examined the relative contribution of young adults’ perceived economic pressures, financial coping and religious meaning-making coping strategies in accounting for variation in their reports of psychological well-being within the context of the United States economic crisis. Results suggest a direct relationship between perceived economic pressure and psychological well-being such that young adults who reported having to make more economic adjustments as a result of economic crisis also reported higher levels of depressed mood and anxiety. Young men and women who reported having to make fewer economic adjustments and being able to meet their material needs reported higher levels of life satisfaction. Regardless of young adults’ self-reported level of economic pressures, the use of education and communication financial coping strategies was related to lower levels of self-reported anxiety and depressed mood and greater life satisfaction. Viewing the financial crisis as a punishment from God was generally associated with young adults’ reports of greater depressed mood and less life satisfaction. Implication of findings for research and practice are discussed.