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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and Economic
Perceptions Indices
Panel Paper # 2
Authors Team:
Umar Taj
Taimur Saeed
(Email: [email protected])
(Email: [email protected])
Presented at: WAPOR Annual Congress, 2015
(Buenos Aires, Argentina)
Note: Presentation is based on research in progress
WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
INTRODUCTION
This Presentation examines 3 Indices related to
National Economy. The first two are Indices of
Transactional activities. (GDP per capita and Gini
coefficient). The third measures sentiments (Consumer
Confidence). The first two have over a period of time
been globalized, the third has yet to achieve that
status
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
Index of Transactional Activity measured by
multi-method approach*
GDP
per Capita
* only minor use of sample surveys
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
GDP
Background:
 An aggregate measure of production
 No single number has become more central to
society in the past 50 years than GDP
 The concept of GDP was first developed by Simon
Kuznets in 1934
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
GDP per Capita (PPP)*: EXAMPLE
* Accessed via World Bank Indicator Data (http://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?display=default)
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
GDP
DISCOURSE ON VALIDITY AND UTILITY OF A GLOBAL INDICATOR

It is measured frequently (most countries provide this data on
quarterly basis), widely (almost all the countries in the world
provide this data) and consistently (technical definition of GDP
is relatively consistent among countries).

GDP per Capita often used as an indicator for living standards,
with changes in living standards promptly detected through
changes in per capita GDP.

The constituents of GDP calculation call for care when
drawing conclusions about the welfare of the states and
quality of life in different countries.
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
Index of Transactional Activity Measured by
Sample Survey Method
Gini Index
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
GINI Index
Background:

Measures the extent to which the distribution of income or
consumption expenditure among individuals or households
within an economy deviates from a perfectly equal distribution

Gini index of 0 represents perfect equality, while an index of
100 implies perfect inequality

It was developed by the Italian statistician and sociologist
Corrado Gini and published in his 1912 paper "Variability and
Mutability“
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
GINI Index
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
DISCOURSE ON VALIDITY AND UTILITY OF GINI INDEX AS A
GLOBAL INDICATOR:
 Can be used to compare diverse countries and different regions or groups
within a country (caution: for a given time interval)
 The Gini coefficient is a relative measure
 Which means that it is possible for the Gini coefficient of a developing
country to rise (due to increasing inequality of income) while the number
of people in absolute poverty decreases.This is because the Gini
coefficient measures relative, not absolute, wealth.
 Gini coefficients are simple, and this simplicity can lead to oversights and
can confuse the comparison of different populations;
 For example, while both Bangladesh (per capita income of $1,693) and
the Netherlands (per capita income of $42,183) had an income Gini index
of 0.31 in 2010, the quality of life, economic opportunity and absolute
income in these countries are very different, i.e. countries may have
identical Gini coefficients, but differ greatly in wealth.
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
Index of Sentiments
Consumer Confidence Index
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
Consumer Confidence Index
Background:

Seeks to find how consumers view their own financial situation,
short-term general economy and long-term general economy

Devised in the late 1940s by Professor George Katona at the
University of Michigan

Index published monthly but has failed to grow into an
important cross-national, regional or global survey
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
Consumer Confidence Index
DISCOURSE ON VALIDITY AND UTILITY:

Consumption expenditure accounts for a big share in the
GDPs of many countries, hence making CCI a key
indicator to look for

Helps us to predict consumer behaviour

Allows us to keep track of public pulse and corroborate
with other key economic indicators
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
Consumer Confidence Index
Global Data
Unlike the GDP per capita and the Gini coefficient, there is no
standard data series for Consumer Confidence (sentiments
data) at a global level.
Based on our search we were not able to find Gallup Inc.
Consumer Confidence data except for America. On the four
others, a short introduction is provide.
1. Gallup Inc.
2. Conference Board/ AC Nielsen
3. WIN Gallup International/ End of Year Survey Series
(not related to Gallup Inc.)
4. Ipsos/MORI
5. Pwc
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
1. Conference Board/ Neilsen:
The monthly Consumer Confidence Survey®, based on a probability-design
random sample, is conducted for The Conference Board by Nielsen in 60
countries.
Questions:
1. Would you say that you are better off or worse off financially than you were a year
ago?
2. Looking ahead, do you think a year from now you will be better off financially, or
worse off, or just about the same?
3. Now, turning to business conditions in the country as a whole, do you think that
during the next twelve months we’ll have good times financially or bad times, or
what?
4. Looking ahead, which would you say is more likely – that in the country as a whole
we’ll have continuous good times during the next five years or so, or that we’ll have
periods of widespread unemployment or depression, or what?
5. Generally speaking, do you think now is a good or bad time for people to buy major
households items?
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
2. Thomas Reuters/IPSOS (24 countries):
Recently announced launch of Global Consumer Sentiment Index in March
2015, they are gathering data from 24 countries.
Questions used:
Now, thinking about our economic situation, how would you describe the current economic situation in <country>? Is it… very
good, somewhat good, somewhat bad or very bad
2. Rate the current state of the economy in your local area using a scale from 1 to 7, where 7 means a very strong economy
today and 1 means a very weak economy.
3. Looking ahead six months from now, do you expect the economy in your local area to be much stronger, somewhat stronger,
about the same, somewhat weaker, or much weaker than it is now?
4. Rate your current financial situation, using a scale from 1 to 7, where 7 means your personal financial situation is very strong
today and 1 means it is very weak
5. Looking ahead six months from now, do you expect your personal financial situation to be much stronger, somewhat
stronger, about the same, somewhat weaker, or much weaker than it is now?
6. Compared to 6 months ago, are you NOW more or less comfortable making a major purchase, like a home or car?
7. Compared to 6 months ago, are you NOW more or less comfortable making other household purchases?
8. Compared to 6 months ago, are you NOW more or less confident about job security for yourself, your family and other
people you know personally?
9. Compared to 6 months ago, are you NOW more or less confident of your ability to invest in the future, including your ability
to save money for your retirement or your children’s education?
10. Thinking of the last 6 months, have you, someone in your family or someone else you know personally lost their job as a
result of economic conditions?
11. Now look ahead at the next six months. How likely is it that you, someone in your family or someone else you know
personally will lose their job in the next six months as a result of economic conditions?
1.
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
3. PwC:
They calculate Global Consumer Index quarterly, using
data gathered from 20 countries.
Category of Indicators:
Confidence indicators by consumer and businesses
Equity markets
Commodity indicators
Activity measures
Details are not available in the public domain
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
4. WIN Gallup International* End of Year Survey Series:
They gather Economic Expectation questions yearly from
65 countries.
Questions:
1- Do you think next year will be better or worse than last
year?
2- Do you think next year will be one of economic
prosperity or difficulty?
* (Not related to Gallup Inc.)
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
Reflection on the Process of
Developing Global Indicators
1- CUSTODIANSHIP ISSUE
There is a marked difference in the development
process of GNP and Gini coefficient on the one hand
and Consumer Confidence Index on the other. The
Central Governments and International Organisations
have assumed ownership and leadership in the case
of the former (GNP and Gini) while this is absent in the
case of Consumer Confidence. It is partly for this
reason that Consumer Confidence could not grow to
become a standardized global index.
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WAPOR Annual Congress (2015): Panel on
GLOBAL INDICES OF OPINIONS AND PERCEPTIONS
Global Economy and
Economic Perceptions Indices
Reflection on the Process of
Developing Global Indicators
2- PROPRIETORY ISSUE
The GNP and Gini are produced by the public sector
(governments) and provided to the users as a public
service. Consumer Confidence data is produced in
the corporate sector. As a result its detailed findings
and data remain restricted.
The combined effect of these two reasons explains
why the Perceptions or Sentiments based Indices of
the Economy lag behind the Transactions based
indices of the Economy in terms of standardization,
acceptability and global coverage.
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THANK YOU