Some new indicators and procedure to get additional information from the Business Tendency Surveys

Fusari, Angelo and Pellissier, Murray (2008): Some new indicators and procedure to get additional information from the Business Tendency Surveys.

Abstract

This paper sets out some procedure allowing to deriving new information from the Business Tendency Surveys. Precisely, the volatility of respondents’ opinions will be computed that can be interpreted as a measure of radical (or true) uncertainty. This measure is strongly recommended by the present economic crisis originated by financial markets that the dominating idea of the impossibility of measuring and hence monitoring radical uncertainty has contributed to consign to an unconstrained and destabilizing speculation. Moreover, some indicators of the persistence of each modality of answer are proposed, as well as a correction of the usual percent of the modalities of survey answers that attributes a higher weight to the answers that do not change in successive survey periods. This correction is mainly suggested by the fact that the degree of persistence of respondents’ opinions is an important sign of entrepreneurs and firms’ behaviour and decisionmaking. The modified percents of the modalities of answers are confronted to the usual ones, and some econometric estimations are provided. The applications use data of the Italian and South African business tendency surveys on a number of variables. The resulting information and elaborations seem to suggest some critical consideration on the content of the harmonized EU surveys, mainly with reference to the reliability of the confidence indicators and the disregard of the volatility of answers with its attitude to provide a meaningful indicator of radical uncertainty

• Item Type: MPRA Paper
• Language: English
• Keywords: Business Tendency Surveys, Expectations, Uncertainty, Business confidence indicators, Econometric estimations
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C10 - General; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C19 - Other; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling; C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs > C89 - Other; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C90 - General

References

Some references to authors’ works on BTS

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Fusari A. (2006 a), Radical uncertainty indicators. Quantitative specifications and applications, 28th CIRET Conference, Rome

Fusari A. (2006 b), The theoretic and empirical importance of measuring uncertainty, readings, 28th CIRET Conference, Rome

Pellissier, GM (2006), Evaluating the impact of disaggregated survey panel response on Business tendency survey results, OECD Workshop, Rome

Pellissier, GM (2007), Business conditions Response: Volatility versus Non-volatility, Mimeo, Bureau of Economic Research, Stellenbosch

Wymer C. R. (1993), “Rwesimul and Escona program, manual and documentation” (mimeo) and WYSEA Systems Estimation and Analysis (computer package). 24