JED, Vol. 21, Special Issue, 2019, pp. 107-124
Consumer Confidence Index in Vietnam: Scale Development and Compilation Methods
Abstract:A consumer confidence index (CCI) is an important economic indicator which is used to adjust
the forecasting of gross domestic product (GDP) and consumer price index (CPI) in the shortterm.
Although there exists standard guidelines from the United Nations Statistics Division and
European Commission, international experience shows the scale that measures a CCI and the
methods of calculating a CCI need to be adapted to the country specific context. Using its own data
from the nationally representative survey and factor analysis methods, this paper constructs a scale
to measure consumer confidence for Vietnam. The paper, then, computes a CCI and proposes the
most appropriate method corresponding to the Vietnamese setting. Validation methods from the
paper show that the Vietnamese CCI calculated in the paper reflects approximately the economic
picture of the whole country as well as six regions of Vietnam, ensuring the validity of using this
index to adjust short-term GDP and CPI forecasts.
Keywords:Confirmatory factor analysis; consumer confidence index; exploratory factor analysis