The UBS Index of Investor Optimism is a useful predictor of macroeconomic trends, and offers “fresh insight on the functioning of the U.S. economy’, according to a new report by Nobel Laureate economist Dr. Lawrence Klein.

Klein’s research was designed to appraise the performance of the index over its five-year history and examines its “use in analyzing the subjective or psychological dimensions that are important in human decision making about economic issues.”

The study compares the Index of Investor Optimism with three of the United States’s top survey-based economic indicators — Survey of Consumer Sentiment by the Institute for Social Research of the University of Michigan, Survey of Consumer Confidence by the Conference Board, and the National Association of Purchasing Management survey.

He concludes that the index provides valuable “quantitative information from a strategic universe that has the potential for enlarging the information content of existing economic surveys,” and benefits from its exclusive focus on individual investors who are more sharply tuned to economic events. It is “as good and probably better in terms of accuracy, than the [other] indices, judging from its degree of correlation with key economic magnitudes such as consumer spending, personal income, industrial production, employment, and stock market averages.”

UBS also announced that it has recalibrated the index to maximize the poll’s economic predictive power and complement the launch of the new UBS Index of Investor Optimism – EU 5 survey on January 28 in Europe. The newly recalibrated index streamlines the survey design to leverage insights into investor attitudes gleaned over the past five years.