Methodology

: Published: Tuesday, 05 January 2010 12:11; Hits: 6513

The IBD/TIPP Economic Optimism Index is the earliest take on consumer confidence each month and predicts with 80% reliability monthly changes in sentiment in well-known polls by The Conference Board and the University of Michigan. The IBD/TIPP Economic Optimism Index is based on a survey of 900-plus adults chosen at random nationwide. The poll is generally conducted in the first week of the month.

An analysis of Final Certified Results of Election 04 and Election 08 show that TIPP was the most accurate pollster of both campaign seasons.

The TIPP Indices, the Economic Optimism Index, the Presidential Leadership Index, and the National Outlook Index, track Americans' opinions and outlooks in three different areas: the economy, the President and the nation.

Began in February 2001, the Indices were developed by TIPP for its media partners Investor's Business Daily and The Christian Science Monitor and are updated on a monthly basis.

Index Calculation

Each index represents an average based on telephone interviews conducted with approximately 900 adults nationwide each month. The index can range from 0 to 100, and is derived by comparing the positive and negative responses while disregarding non-responses (such as "not sure" or "no answer").

1. If the question assumes either one positive or one negative response (better or worse, approve or disapprove), the following formula is used to calculate this question index component:

K= 50 +0.5*(p(+) - p(-))

where p(+) is the percent that answered positively, p(-) is the percent that answered negatively.

2. If the question allows a choice from two positive or two negative responses (very satisfied, somewhat satisfied, not very satisfied or not at all satisfied), the following formula is used to calculate this question index component:

K= 50 + 0.5*(p1(+) - p1(-)) + 0.25*(p2(+) - p2(-))

where p1(+) is the percent which answered strongly positive, p1(-) is the percent which answered strongly negative, p2(+) is the percent answered moderate positively, and p2(-) is the percent answered moderately negative.

The question components are averaged to calculate the index. When an index level is more than 50, the number giving a positive response is more than the number giving a negative response. When all answers are strongly positive, the index is 100. When all answers are strongly negative, the index is 0.

The TIPP Economic Optimism Index

The index is based upon responses to 3 questions:

1. In the next 6 months, do you think that economic conditions in the country will be better, worse, or about the same as compared to now?

2. In the next 6 months, do you think that your personal financial situation will be better, worse, or about the same as compared to now?

3. How satisfied are you with the current federal economic policies meant to keep the economy going in the right direction: Very satisfied, somewhat satisfied, not very satisfied or not at all satisfied?

The TIPP Presidential Leadership Index

The index is based upon responses to 3 questions:

1. Overall, is your opinion of Barack Obama generally favorable, generally unfavorable, or are you not familiar enough to say one way or another?

2. In general, do you approve or disapprove of the way Barack Obama is handling his job as president, or are you not familiar enough to say one way or the other?

3. How would you describe the leadership that President Obama is providing for the country? Would you say it is very strong, strong, moderate, weak or very weak?

The TIPP National Outlook Index

The index is derived on the basis of 6 components: the scores for the TIPP Economic Optimism Index and the TIPP Presidential Leadership Index, in addition to responses to the following 4 questions:

1. In general, how satisfied are you with the direction things are going in the country at this time? Would you say you are very satisfied, somewhat satisfied, not very satisfied or not at all satisfied?

2. Generally speaking, how satisfied are you with the direction things are going in the country at this time in terms of morals and ethics? Would you say you are very satisfied, somewhat satisfied, not very satisfied or not at all satisfied?

3. Generally speaking, over the next 6 months, do you think that the position of the United States as a world leader will be better, worse, or about the same as it is now?

4. In the next 6 months, do you think that your quality of life will be better, worse, or about the same as compared to now?

To derive the final score for the National Outlook Index, the responses to these questions, the scores for the TIPP Economic Optimism Index, and the TIPP Presidential Leadership Index are combined.
The TIPP Indices, the Economic Optimism Index, the Presidential Leadership Index, and the National Outlook Index, track Americans' opinions and outlooks in three different areas: the economy, the President and the nation.