1. Measuring Perception
The limitations of the questionnaire methodology for gathering research data.
Gilbert O’Neil Mushure

2. Introduction: What is perception?
Confidence Indicators and Their Relationship to Changes in Economic Activity Teresa Santero, Niels Westerlund (1996)
Examined the usefulness of consumer and business confidence surveys in assessing the cyclical position of the economy and for forecasting output movements.

3. Introduction: What is perception?
Confidence Indicators and Their Relationship to Changes in Economic Activity Teresa Santero, Niels Westerlund (1996)
They investigated the relationship between the results of consumer and business confidence surveys and economic output in different OECD member countries.

4. Introduction: What is perception?
Confidence Indicators and Their Relationship to Changes in Economic Activity Teresa Santero, Niels Westerlund (1996)
Their research highlighted the difficulty of measuring perception.
“The paper finds that sentiment measures obtained from business surveys provide valuable information for the assessment of the economic situation and forecasting. However, the relationship between sentiment indicators and output varies considerably across countries and sentiment measures.” Santero and Westerlund, 1996

5. Measuring Confidence
Confidence is an elusive concept which cannot be defined precisely or measured directly.
Yet confidence factors play a prominent role is assessments by business cycle analysts.

6. Measuring Confidence
At a theoretical level, confidence does not play a major role in the analysis of economic behaviour.
The most explicit reference to business sentiment in business cycle theory is probably "animal spirits", used to explain the volatility of private business investment spending.

7. Measuring Confidence Animal Spirits
‘Bull Market’ – a market in which share prices are rising, encouraging buying
‘Bear Market’ – a market in which share prices are falling, encouraging selling

8. Measuring Confidence
Measuring consumer and business confidence is essentially measuring the perception of households and firms within the economy.

9. Diagram 1: The five sector circular flow of income in the economy.
(Wikimedia Commons, retrieved 15/9/17)

10. Measuring Confidence
At a practical level confidence cannot be measured directly.
However it can be measured through observation.

11. Business Confidence Surveys in Zimbabwe
Two national surveys which have been commonly used as measures of business confidence in the external environment in Zimbabwe are the Zimbabwe National Statistics Agency (ZimStat) Business Tendency Survey [1] and the Confederation of Zimbabwe Industries (CZI) Manufacturing Sector Survey [2].

12. Business Confidence Surveys in Zimbabwe
The two surveys collect and analyse responses from industry leaders and management in Zimbabwe using the questionnaire methodology.

13. A question of methodology
Is the questionnaire methodology the best way to collect data about consumer and business confidence in the economy?

14. Weaknesses of the questionnaire methodology
Need validation with quantitative information
Questions must be kept short
Might have missing data
Possible reactive effects e.g. social desirability, political biases, perspectives
Non response to selective items
Low response rates
Open ended items possibly resulting in vague answers
Open ended items possibly reflecting differences in verbal ability, obscuring issues of interest
Data analysis is subjective [3]

15. An alternative measure of business confidence in Zimbabwe
Mushure, G. O. N. (2015). Perception of the External Environment in Zimbabwe : A case study of Delta Corporation Limited. International Journal of Sciences: Basic and Applied Research, 22(2),
The purpose of this research was to explore the use of qualitative accounting information to measure business confidence in the external environment in Zimbabwe.

16. An alternative measure of business confidence in Zimbabwe
Business confidence is a measure of perception.
Perception is difficult to measure directly.
Perception is best observed. [4]

17. An alternative measure of business confidence in Zimbabwe
The use of qualitative accounting information enables measurement of business confidence more accurately through observation.

18. An alternative measure of business confidence in Zimbabwe
Qualitative accounting information is non-financial information contained in company reports.
Examples
The Chairman’s Statement
The CEO’s Statement

19. An alternative measure of business confidence in Zimbabwe
These statements are not part of the legal framework and do not have to be written in formal terms nor conform to a detailed checklist of items, and as a result this lack of regulation allows greater creativity in expression. [5]

20. An alternative measure of business confidence in Zimbabwe
A sentiment measure of confidence in the external environment can be derived from an assessment of Chairman’s statement, from which a judgement can be made of the type “negative”, “neutral” or “positive” on each comment made about the business environment.

21. An alternative measure of business confidence in Zimbabwe
In this research, each comment on any aspect of the external environment – social, political, economic - was classified as either ‘negative’, ‘neutral’ or ‘positive’.

22. An alternative measure of business confidence in Zimbabwe
A balance for each period of reporting was then calculated by subtracting the number of negative sentiments from the number of positive sentiments.

23. Results
The results indicated that business confidence can be measured using qualitative accounting information.

24. Conclusion
Researchers should consider alternative methodologies for gathering data.
The commonly used questionnaire methodology has significant limitations and is therefore unreliable, especially when gathering qualitative data.

25. References
[1] Zimbabwe National Statistics Agency. “Zimbabwe Business Tendency Survey.” Internet: [Feb. 28, 2015].
[2] CZI. “Manufacturing Sector Survey.” Internet: [Feb. 28, 2015]
[3] Johnson, B., & Turner, L. A. (2003). Data collection strategies in mixed methods research. Handbook of mixed methods in social and behavioral research,
[4] K. Taylor, R. McNabb. “Business Cycles and the Role of Confidence: Evidence for Europe.” Oxford Bulletin of Economics and Statistics, Vol. 69(2), pp , 2007
[5] J. Stittle. Annual Reports: Delivering Your Corporate Message to Stakeholders, Gower Publishing Ltd., 2003, pp. 79 – 81