Media based sentiment indices as an alternative measure of consumer confidence
Stellenbosch Working Paper Series No. WP17/2018Publication date: September 2018
Author(s):
[protected email address] (Department Economics, Stellenbosch University)
The world is currently generating data at an uprecedented rate. Embracing the data revolution, case studies on the construction of alternative consumer confidence indices using large text datasets have started to make its way into the academic literature. These 'sentiment indices' are constructed using text-based analysis. A subfield within computational linguistics. In this paper we consider the feasibility of constructing online sentiment indices using large amounts of media data as an alternative for the conventional survey method in South Africa. A clustering framework is adopted to provide an indication of feasible cadidate sentiment indices that best reflect the traditional survey based confidence consumer index conducted by the BER. The results indicate that the best candidate indices are linked to a single data source with a focus on using specialised financial dictionaries. Finally, composite indices for consumer confidence is constructed using Principle Component Analysis. The resulting indices' high correlation with the traditional consumer confidence index provide motivation for using media data sources to track consumer confidence within an emerging market such as South Africa using sentiment based techniques
JEL Classification:B41, C52, C55, C83
Keywords:Big Data, Sentiment Analysis, Consumer Confidence
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Upcoming Seminars
Monday 21 July 202512:00-13:00
Izak Odendaal: Old Mutual Wealth Chief Investment Strategist
Topic: "Diverging fiscal policies and what it means for markets"
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Dr Neil Rankin: Ceo Of Predictive Insights & Stellenbosch University
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Prof Willem Boshoff: Stellenbosch University
Topic: "Two competing approaches in South African competition policy: merger control and anti-cartel enforcement over the past 30 years"
BER Weekly
27 Jun 2025 Another setback for the GNU, but oil markets breathe a little easierThis week was marked by heightened tensions both domestically and internationally. At home, friction intensified between the two largest parties in the Government of National Unity (GNU), the ANC and the DA, following the firing of one of the DA's deputy ministers. Internationally, the US conducted airstrikes on three Iranian nuclear facilities using...
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