This simple formula pinpointed the start of recessions in 1981, 1990, and 2001, but was misleading in the early 1990s, when the index indicated a recession for a year after it had officially ended in March 1991.
The index has inspired serious research into testing whether the tone and volume of economic reporting over time has affected people's perceptions. Mark Doms (Federal Reserve Bank of San Francisco) and Norman Morin (Board of Governors of the Federal Reserve System) (2004) created indexes based on the number of articles that contain certain keywords and phrases in the title or first paragraph in the thirty largest newspapers across the US. For instance, the "recession index" is based on the number of articles that mention "recession" or "economic slowdown.".
- Doms, Mark; Morin, Norman (July 2004). "Consumer Sentiment, the Economy, and the News Media — FRBSF Working Paper 2004-09" (PDF). Federal Reserve Bank of San Francisco. Archived (PDF) from the original on 2008-09-06. Retrieved 2008-02-28.
- Doms, Mark (2004-10-22). "FRBSF Economic Letter — 2004-29; October 22, 2004 — Consumer Sentiment and the Media". Federal Reserve Bank of San Francisco. Archived from the original on 2008-12-03. Retrieved 2008-02-28.