H Insights From Consumer Surveys

This module emphasizes the significance of subjective information in gaining a deeper understanding of the behaviors of individuals, businesses, and policymakers. Here, subjective information refers to personal beliefs regarding the current and anticipated state of the economy. Such beliefs are crucial because people are forward-looking. For example, potential homeowners weigh their future financial stability when considering a home purchase and the subsequent mortgage. Similarly, businesses evaluate predicted profits when considering the establishment of a new factory. Tools like surveys and textual analysis can be instrumental in capturing these perspectives. This module concentrates on consumers’ subjective information, utilizing the University of Michigan’s consumer survey to gain insights into the beliefs of consumers. The focus is on crafting indicators for consumer sentiment and identifying prevailing consumer trends.

H.1 Overview

Outlined below are the chapters contained in this module:

  • Chapter 20: “Why Subjective Information Matters” emphasizes the role of subjective beliefs and anticipations in economic decision-making, highlighting their tangible impact on the economy beyond objective measures.
  • Chapter 21: “Insights From Consumer Surveys” delves into the University of Michigan’s Survey of Consumers, explaining its significance in capturing U.S. households’ economic perceptions and detailing its methodology, while also highlighting the creation and implications of key consumer indices like the ICS, ICC, and ICE.

Additionally, the following DataCamp courses supplement the chapters mentioned above:

  • Cleaning Data in R: This course teaches techniques to clean dirty data in R, covering common issues to advanced challenges, and introduces record linkage for merging inconsistent datasets.
  • Working with Dates and Times in R: This course equips learners with the skills to parse, manipulate, and compute dates and times in R using the lubridate package.

The module culminates in the creation of a data report:

  • Data Report on Consumer Indices: Assessing your expertise in analyzing and crafting consumer indices using survey- or text-based indicators in relation to traditional economic indicators.

H.2 Learning Objectives

Upon completion of this module, participants will be able to:

  1. Recognize the importance of subjective information in economic decision-making processes and understand its tangible impact on the economy.
  2. Analyze the role of consumer beliefs and anticipations in shaping the trajectories of macroeconomic trends.
  3. Demonstrate proficiency in understanding and interpreting the University of Michigan’s Survey of Consumers and its key indices like the ICS, ICC, and ICE.
  4. Differentiate between objective measures and subjective beliefs in economic analysis.
  5. Apply practical techniques in R to clean and manage data effectively, ensuring the accuracy and reliability of the datasets.
  6. Work competently with dates and times in R, leveraging the capabilities of the lubridate package.
  7. Construct and evaluate new survey- or text-based indicators that can provide alternative insights compared to traditional economic indicators.
  8. Communicate effectively the results of analyses, particularly in relation to consumer sentiment and its implications for the broader economy.

H.3 Learning Activities & Assessments

Throughout this module, you’ll engage in the following activities:

  • Textbook Engagement: Read the textbook chapters 20 and 21 and reproduce the content provided. Input the code from the chapters into RStudio and verify that your results match the chapter outputs.

  • DataCamp Training: Work through the Cleaning Data in R and Working with Dates and Times in R courses on DataCamp. While progressing through the course, keep an R script handy and apply the learned functions to any of the datasets introduced in this module. This preserves the new functions of the course and potentially offers new insights from the chosen dataset.

  • Data Report Creation: To consolidate your learning, craft a Data Report on Consumer Indices using R Markdown. Your report should clearly display data, provide meaningful analyses, and embody the module’s content.

Your assessment will be based on:

  • DataCamp Course Completion: Finish the designated DataCamp courses for this module. Your grade is based on course completion; thus, you receive full credit by completing all chapters and obtaining a minimum of 75% XPs (experience points) by the deadline. Hence, while the Take Hint and Show Answer options reduce your XPs, they won’t affect your module grade if you stay above the 75% threshold.

  • Data Report Evaluation: The quality of the data report is central to module assessment. It should be professional, suitable for clients, and reflect the module’s content. Ensure you adhere to the data report instructions.

For further guidance on maximizing your textbook and DataCamp experience, consult the Textbook Engagement and Learn R with DataCamp sections. For specifications on the data report’s format and content, consult the Data Report Instructions and the subsequent section below.

H.4 Data Report on Consumer Indices

Select one of the survey- or text-based indicators explored in this module for your report. Furthermore, use the data discussed in this module to create your own survey- or text-based indicator. Illustrate why this new indicator could yield valuable insights. Conduct a business cycle analysis for your newly created survey- or text-based indicators by comparing them to traditional economic indicators.

As preparation for this assignment, please work through the module chapters and DataCamp courses listed under the overview section above. Ensure your report adheres to the guidelines detailed in Data Report Instructions, which dictates the creation of two versions: official and internal. Upon completion, submit both versions on Blackboard.