Definitions

The five questions

Each household in the sample is asked five questions relating to consumer sentiments. These questions seek an assessment of the household regarding its current and expected financial status and its perceptions regarding the external economic conditions.

The respondent is the most articulate person available in the household at the time of the survey. The respondent is of 18 years or more, of age. The respondent is encouraged to seek the views of other members of the household wherever necessary to get a response that essentially reflects the view of the household as a whole.

Each question is a multiple choice question and the respondent chooses one of the options available.

  • Question 1 (Q1): Compared to a year ago, how is your family faring financially these days?
    Options for Question 1: (1) Better off compared to a year ago, (2) Same as a year ago, (3) Worse than a year ago.
  • Question 2 (Q2): Do you think that a year from now your family would be faring financially?
    Options for Question 2: (1) Better off compared to now, (2) Same as now, (3) Worse than now.
  • Question 3 (Q3): How would you describe the next 12 month's financial and business conditions in our country?
    Options for Question 2: (1) Good times, (2) Uncertain times, (3) Bad times.
  • Question 4 (Q4): What do you think would the next 5 year's financial and business conditions in our country be?
    Options for Question 2: (1) Continuously Good times, (2) Uncertain times with ups and downs, (3) Continuously Bad times.
  • Question 5 (Q5): Do you think that this is generally a good or bad time to buy things like furniture, refrigerator, television, two-wheeler, and car?
    Options for Question 2: (1) Good time, (2) Same as other times, (3) Bad time.

Index of Consumer Sentiments

Steps to calculate the Index of Consumer Sentiments (ICS) are the following:

  • Compute relative scores (per cent giving favourable replies minus per cent giving unfavourable replies, plus 100) for each of the five questions. The five questions are Q1, Q2, Q3, Q4 and Q5.
  • Round each relative score to the nearest whole number.
  • Sum the five rounded relative scores.
  • Divide the Sum by the base period index.
  • ICS = (Q1 + Q2 + Q3 + Q4 + Q5 / Base Index) * 100

Index of Current Economic Conditions

Steps to calculate the Index of Current Economic Conditions (ICC) are the following:

  • Compute relative scores (per cent giving favourable replies minus per cent giving unfavourable replies, plus 100) for Q1 (Compared to a year ago, how is your family faring financially these days?)
    and Q5 (Do you think that this is generally a good or bad time to buy things like furniture, refrigerator, television, two-wheeler, car?)
  • Round the relative scores to the nearest whole number.
  • Sum both rounded relative scores.
  • Divide the Sum by the base period index.
  • ICC = (Q1 + Q5 / Base Index) * 100
  • Index of Consumer Expectations
  • Steps to calculate the Index of Consumer Expectations (ICE) are the following:
    Compute relative scores (per cent giving favourable replies minus per cent giving unfavourable replies, plus 100) for Q2 (Do you think that a year from now your family would be faring financially?), Q3 (How would you describe the next 12 month's financial and business conditions in our country?) and Q4 (What do you think would the next 5 year's financial and business conditions in our country be?)
  • Round the relative scores to the nearest whole number.
  • Sum all the three rounded relative scores.
  • Divide the Sum by the base period index.