Predicting Economic Optimism and Pessimism: A Hybrid Econometric–Machine Learning Approach for Socioeconomic Forecasting

This study investigates how individuals' economic outlooks are influenced by their opinions of the current economic condition and their personal traits, including demographics and socioeconomic factors. Analysis of the Rural Consumer Confidence Survey data of the Reserve Bank of India indicates that incorporating subjective perception measures enhances comprehension of the elements affecting economic outlook compared to their exclusion. The inclusion of these subjective measures in the response analysis significantly enhanced the model's capacity to elucidate the factors influencing future economic optimism. The study's results unequivocally demonstrate that the most significant predictors of future economic optimism are perceptions of overall economic conditions and anticipated employment opportunities, while the influences of perceptions regarding income, spending, and inflationary price increases are considerably weaker. The convergence of econometric and machine learning studies indicates that the study's findings are robust and consistent. This study's findings indicate that future economic optimism will be more closely associated with individuals' anticipatory macroeconomic a