Title: Investment sentiment measures
Description: "This paper compares investor sentiment measures based on consumer confidence surveys with measures extracted from the closed-end fund discount (CEFD).  Our evidence suggests that these two kinds of sentiment measures do not correlate well with one another.  For a short 2-4 year period in which we have direct investor sentiment survey data from UBS/Gallup, only the consumer confidence correlates well with investor sentiment.  Further, only the consumer confidence based measure can robustly explain the small-firm return spread and the return spread between stocks held disproportionately by retail investors and those held by institutional investors.  Surprisingly, there is even a hint that the consumer confidence measure can explain closed-end fund IPO activity, while the CEFD cannot.  In sum, our evidence supports the view that sentiment plays a role in financial markets, but that the CEFD may be the wrong measure of sentiment"--National Bureau of Economic Research web site.
Subjects: Consumer confidence, Investments, Measurement, Psychological aspects of Investments