Analysis on Factors Influencing Consumer Survey Index in Korea
Authors:   Asia-Europe Perspective Association, Seo Young Soo 
Published: June 2018

Consumer trends in Korea are based on the weighted average of consumer responses to economic conditions, living conditions, household income, consumption expenditure, employment, and prices. Consumer evaluations and expectations on current , future economic with consumption patterns are used as a very useful tool for predicting the current sensation and future consumption expenditure.
In this study, we have identified what factors influence the consumer trend index through a series of time series data, what time the index has changed drastically and what factors influenced the change. In particular, we focused on the factors affecting the US subprime financial crisis in 2008 and the European fiscal crisis in 2011. To do this, we firstly examine the regression analysis of the full model and the reduced model, secondly, the structural change of the data through the Chow test, and finally, we divide the dependent variables by period and find out what the most influential independent variables are .
As a result of the analysis, the judgment of the consumer is very closely related to the business survey index, the economic composite index, the service production index, the wholesale trade index, and the housing rental price index. The relationship between the judgement of the consumer and business survey index, the economic composite index, the service production index is positive, while the wholesale trade index, the housing rental price index show negative relation. In addition, the US financial crisis in 2008 and the European fiscal crisis in 2011 had a significant impact on the structural changes in the consumer trend index. The factors that ultimately influenced these changes were the business survey index and the economic composite index.
The following implications were derived through this study. First, in terms of financial market stability, the composite index is more influential than other indexes such as the business survey index. This is based on the empirical result that the regression coefficient of the economic composite index has fallen about twice as much as before the US financial crisis in 2008. In addition, it can be inferred from the analysis that the economic composite index is recovering rapidly after the 2011 European debt crisis. Second, the economic fluctuations of the past are manifested by a combination of various factors in addition to the actual crisis, which is typically the psychology of consumers. Therefore, it is necessary to increase the weights of consumers’ economic psychological indicators or actively add new reflection factors when calculating the consumer trend index. Third, it is necessary to accumulate comparative analysis data on the perceptions of regional differences in the consumer trend index and analyze it empirically so as to develop the perception indexes of consumers and entrepreneurs that cover regional differences.
Based on the results of this study and the implications, it is possible to derive forecast results that are closer to the actual economic phenomena by further subdividing the current consumer trend index with income and occupation categories into index with income, occupation, region, and household. Also, by analyzing the mutual influences by factors, more specific consumption trends, as well as predictability about the overall economic trends, will be secured. Furthermore, it can be used to analyze empirically whether the time series data among the individual indices are causal variables or result variables that cause the movement among economic variables.