Drivers of perceptions towards euro adoption among the young: evidence from Bulgaria

Abstract

Objectives: Perceptions towards euro adoption in the general public are very important for the successful introduction of the common currency into a given economy. Young consumers tend to have lower interest and political participation rates, but their acceptance of a new currency is crucial. This paper investigates a sample of Bulgarian students in order to measure and model the preferences of young consumers towards adopting a new national currency, and potentially glean insights that could be useful for the formulation of public policy. Methods/Approach: We survey a total of 296 predominantly young participants asking them both traditional demographic questions as well as behavioral and political ones such as social network and online video usage as well as policy stance and trust in institutions. The variables are used as predictors in a regression modelling framework that investigates the drivers behind the dynamics of euro perceptions. Results: We find a strong and robust effect of overall trust in institutions on perceptions towards the euro, as well as an expected effect of the policy preference. The higher trust in institutions leads to a more positive attitude towards the adoption of the common currency. Similarly, more right-leaning pro-market policy preferences are also associated with a more favorable view of the euro. While the consumption of online videos is unimportant, the overall time spent in social networks does have a statistically significant positive effect on preferences. Conclusions: The results give some initial directions as to what policy should be undertaken to most effectively inform young consumers on the benefits of adopting the euro as a new currency, and how this demographic can be segmented to deliver information most efficiently.