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Consumer Expectations Survey and Quarterly Social Weather Survey: Evidence of Convergent Validity and Causality

Year: 2019       Vol.: 68       No.: 2      

Authors: Edsel L. Beja Jr.


The paper tests the convergent validity and causality of the Consumer Expectations Survey from the Bangko Sentral ng Pilipinas and the Quarterly Social Weather Survey from the Social Weather Stations. The results indicate that there is convergent validity; and that there is bi-direction causality. Further results reveal that both share a common set of determinants. Overall, the findings imply that the Consumer Expectations Survey and the Quarterly Social Weather Survey embody comparable information. As such, one can be a proxy measure of the other. For policy, the findings support the view that a monetary approach for controlling the overall performance of the country, especially with regard to the inflation rate, in conjunction with a fiscal approach for securing the provision of basic social services are key to an effective management of sentiments and for an improvement in the quality of life.

Keywords: Consumer Expectations Survey, Quarterly Social Weather Survey, convergent validity, cointegration, causality, Toda-Yamamoto procedure

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