Formation of Households' Opinions and Forecasts with Structural Equation Modeling

Abstract

In this paper, an issue of interdependence between the responses of respondents in the State of the Households survey in Poland was investigated. Four areas were proposed in which respondents provide answers to the questionnaire: current situation of the household (CHS), current situation of the economy (CES), forecasted situationof the household (FSH) and forecasted economic situation (FSE). For each of the areas with application of the multi-group confirmatory factor analysis a measurement model was estimated. It was shown that for three of the four areas (except CHS) it is possible to select a set of questions measuring consistently analyzed area. For CHS a single question indicator describing the area was proposed. In the following step a structural model was estimated. Thus it was possible to verify the relationships between latent variables (areas). It was shown that households responses to questions concerning FSH are interrelated with responses in each of the other three areas. Strong interdependence between individual respondents' answers in the areas of (1) CES and FSE, but also (2) CES and CHS was identified. In the course of that study it was also possible to conclude that at the household level a change in opinion in the area of CES affects in all periods with the same magnitude opinions in the other areas. It was confirmed by estimating the structural model with the imposed conditions of equal factor loadings. (original abstract)