The Consumer Sentiment Index (CSI) is an important tool for predicting consumer behavior. In the context of the development of a market economy in Russia, consumers begin to dictate their requirements. Entrepreneurs need to know the mood of consumers, their purchasing intentions in order to most effectively build plans for production, import or sales, for the organization of marketing and advertising. Forecasting properties of personal income tax tested by the practice of many decades in most developed countries with market economies.

The CSI provides short-term forecasting of the development of the Russian economy and gives the business sector the opportunity to respond more competently and in a more timely manner to changes in the economic situation.

The methodology for constructing the CSI is simple: the index is calculated on the basis of respondents’ answers to five questions. For each question, an individual index is built as the difference in the shares of positive and negative answers, and 100 is added to avoid the appearance of negative values of the index. The aggregate index of the CSI is calculated as the arithmetic average of individual indices. The CSI changes in the range from 0 to 200, and index values less than 100 mean the predominance of  negative assessments in society.

The CSI is based on public opinion polls conducted on a representative sample reflecting the opinions of an adult (over 16 years old), urban and rural population of the country (the number of respondents is 2000). In Russia, measurements of personal income tax have been carried out since the mid-90s.

QUESTIONS FOR THE CONSTRUCTION OF CSI

(1)  HOW HAS YOUR FAMILY’S FINANCIAL SITUATION CHANGED OVER THE PAST YEAR?

1. Rather improved

2. Unchanged

3. Rather worsened

(2) HOW DO YOU THINK YOUR FAMILY’S FINANCIAL SITUATION WILL CHANGE IN THE COMING YEAR?

(1) rather improve (2) remain unchanged (3) rather worsen

(3) IF WE TALK ABOUT THE ECONOMIC CONDITIONS IN THE COUNTRY AS A WHOLE, DO YOU THINK THE NEXT 12 MONTHS WILL BE A GOOD TIME FOR THE COUNTRY’S ECONOMY OR A BAD TIME?

1. Good

2. Good, but not in everything

3. Not good, but not bad either

4. Bad, but not in everything

5. Bad

(4) AND IF WE TALK ABOUT THE NEXT FIVE YEARS, WILL THEY BE A GOOD OR BAD TIME FOR THE COUNTRY’S ECONOMY?

1. Good

2. Not good, but not bad either

3. Bad

(5) WHEN IT COMES TO MAJOR HOME PURCHASES (SUCH AS FURNITURE, REFRIGERATOR, CONSUMER ELECTRONICS, TELEVISION), DO YOU THINK NOW IS GENERALLY A GOOD OR BAD TIME TO MAKE SUCH PURCHASES?

1. Good

2. Not good, but not bad either

3. Bad