Application of Hong Kong consumer satisfaction index : formulation of investment portfolio and relationship with the Hong Kong macro-economic condition

香港消費者滿意指數的應用 : 用以制定投資組合及與香港的宏觀經濟狀況關係

Student thesis: Master's Thesis

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Award date3 Oct 2011

Abstract

Consumer satisfaction has well been recognized as a critical element for successful businesses. Sweden produced the first nation-wide Consumer Satisfaction Index in 1989 to measure Consumer satisfaction in an objective way, followed by several other countries with their own versions of the same index. Although numerous studies exist in the literature exploring the relationship between consumer satisfaction, company performance and other economic indicators, most of them use only consumer satisfaction indices from the western countries, e.g. SCSB and ACSI etc. This thesis addresses two main applications of Hong Kong Consumer Satisfaction Index (HKCSI). Using HKCSI data, the effect of consumer satisfaction on company equity value were identified for 16 listed companies using linear regression model. A hypothesized investment portfolio was built and its return is compared with market return using Capital Asset Pricing Model (CAPM). The return is 175% in 6 years time, which is 1.4 times higher comparing with market return (73%). The beta risk of the whole period is 0.799, and this indicates the portfolio risk is not significantly different from the market. This study shows that consumer satisfaction can be applied for formulating investment portfolio with better performance than market rate. The second study went on by exploring the influences of Hong Kong macroeconomic conditions on consumer satisfaction using the principal component analysis and Least-square Regression. Two principal components, namely Economic Growth and Economic Condition, have been found to account for 85.1% of the variation in HKCSI. By investigating the association between macroeconomic conditions and consumer satisfaction, firm can have better understanding on how economic effects affecting its own satisfaction score.

    Research areas

  • Hong Kong, Portfolio management, Hong Kong (China), Economic conditions, 1997-, Consumer satisfaction, China