Using Debit Card Payments Data for Nowcasting Dutch Household Consumption

31 Pages Posted: 4 Oct 2017 Last revised: 12 Oct 2017

See all articles by Roy Verbaan

Roy Verbaan

Erasmus University Rotterdam (EUR)

Wilko Bolt

De Nederlandsche Bank (Dutch Central Bank); VU University Amsterdam

Carin van der Cruijsen

De Nederlandsche Bank

Date Written: September 18, 2017

Abstract

In this paper we analyse whether the use of debit card payments data improves the accuracy of one-quarter ahead forecasts and nowcasts (current-quarter forecasts) of Dutch private household consumption. Since debit card payments data are timely available, they may be a valuable indicator of economic activity. We study a variety of models with payments data and find that a combination of models provides the most accurate nowcast. The best combined model reduces the root mean squared prediction error (RMSPE) by 18% relative to the macroeconomic policy model (DELFI) that is used by the Dutch central bank (DNB). Based on these results for the Netherlands, we conclude that debit card payments data are useful in modelling household consumption.

Keywords: Nowcasting, Debit Card Payments, Household Consumption, Midas

JEL Classification: C53, E27

Suggested Citation

Verbaan, Roy and Bolt, Wilko and van der Cruijsen, Carin, Using Debit Card Payments Data for Nowcasting Dutch Household Consumption (September 18, 2017). De Nederlandsche Bank Working Paper No. 571. Available at SSRN: https://ssrn.com/abstract=3047122 or http://dx.doi.org/10.2139/ssrn.3047122

Roy Verbaan

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Wilko Bolt (Contact Author)

De Nederlandsche Bank (Dutch Central Bank) ( email )

P.O. Box 98
1000 AB Amsterdam
Netherlands

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

Carin van der Cruijsen

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

HOME PAGE: http://www.dnb.nl/en/onderzoek-2/onderzoekers/overzicht-persoonlijke-paginas/index.jsp

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