Measurement of forecasting ability of consumer confidence index on consumption

This study analyzes the effects of the consumer confidence index on the consumption expenditures in Turkey. For this purpose, the study not only provides the theoretical background and reviews the previous literature, but also applies an empirical examination for the period from January 2004 to June 2018. In the study, where consistent (robust) standard errors are taken into account in the Ordinary Least Squares (OLS) method, is also used many control variables. According to the empirical findings, the consumer confidence index has a positive effect on consumption expenditures. According to the results of the Toda-Yamamoto Granger Causality analysis, there is also a unidirectional causal relationship from the consumer confidence index to the consumption expenditures.