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Journal of European Economic History
2026, Volume:7, Issue :2 : 259-277 doi: https://doi.org/10.61336/JEEH/26-2-23
Research Article
Predicting Economic Optimism and Pessimism: A Hybrid Econometric–Machine Learning Approach for Socioeconomic Forecasting
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1
Department of Economics, School of Management, O.P. Jindal University, Raigarh, India.
2
School of Management, O.P. Jindal University, Raigarh, India.
3
Department of Economics, Kirodimal Government Arts and Science College, Raigarh, Chhattisgarh, India.
4
Department of Humanities, O.P. Jindal University, Raigarh, India.
Abstract

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 and labour market expectations than with their present socioeconomic situation or personal attributes. This indicates that individuals' future economic optimism will be shaped by their perceptions of the economy and the signals they receive regarding the future of employment within it.

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