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Media‐Based Sentiment Indices as an Alternative Measure of Consumer Confidence
Author(s) -
Odendaal Hanjo,
Reid Monique,
Kirsten Johann F.
Publication year - 2020
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/saje.12261
Subject(s) - consumer confidence index , index (typography) , confidence interval , sentiment analysis , econometrics , granger causality , cluster analysis , computer science , measure (data warehouse) , statistics , data mining , economics , mathematics , business , artificial intelligence , marketing , world wide web
In this paper, we consider the feasibility of constructing online sentiment indices, using large amounts of media data, as an alternative to the conventional survey method used to create the consumer confidence index in South Africa. A clustering framework is adopted to provide an indication of possible candidate sentiment indices constructed from a combination of different text sources and dictionaries that best mimic the traditional survey‐based consumer confidence index from the South African Bureau for Economic Research (BER). The results conclude that it is possible to create an index using sentiment analysis using online editorial data that does resemble the BER’s consumer confidence index. The different media‐based sentiment indices (MSI) show a significant level of correlation and co‐movement with the BER’s CCI. Impulse responses and cross‐correlation functions indicate that the MSI could potentially lead the survey‐based method up to two quarters. Furthermore, Granger‐causality tests show that the media‐based indices are good predictors of future consumer confidence index values. The results provide motivation for further study on the use of sentiment‐based techniques and online media data sources to track consumer confidence within an emerging market such as South Africa.