How General Trust in Financial Institutions Affects the Relationship between Economic Healthiness and Consumer Confidence

Consumer confidence (CC) is of particular interest to economic policy makers and societies at large since CC is often regarded as an indicator of near-term economic growth. While individuals’ economic healthiness (EH) is known as an important predictor of CC, this study adds to previous research by (a) suggesting that this relationship may differ across levels of individuals’ general trust in financial institutions (GTF) and (b) integrating EH, CC, socio-economic variables, and economic knowledge in one study to grasp their potential complex relationships. Based on a survey of 3,185 individuals, we found that GTF has a positive direct influence on CC and that GTF negatively moderates the relationship between EH and CC. Among other results, we also found that both economic knowledge and educational level negatively moderates the relationship between GTF and CC. The study results may be of high interest for policymakers, financial managers, academics and others seeking further insights into consumer confidence (CC).