Polling data does not follow the laws of arithmetic. Here’s a common example that has direct relevance to presidential elections: Many Americans consistently tell pollsters that they are reasonably satisfied with their personal financial situation, but they believe the national economy is getting worse.
Polling data does not follow the laws of arithmetic. Here’s a common example that has direct relevance to presidential elections: Many Americans consistently tell pollsters that they are reasonably satisfied with their personal financial situation, but they believe the national economy is getting worse.
To be sure, in an economy as large and diverse as ours, there will always be people who suffer, even when the national economy is strong — and it is strong right now. Disparities between national and regional economies are common, too — Atlanta’s economy is strong while New York’s is struggling. But when pollsters compile a truly representative national sample, personal and geographic idiosyncrasies should disappear. Roughly speaking, the typical American lives and works in typical economic circumstances.
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To be sure, in an economy as large and diverse as ours, there will always be people who suffer, even when the national economy is strong — and it is strong right now. Disparities between national and regional economies are common, too — Atlanta’s economy is strong while New York’s is struggling. But when pollsters compile a truly representative national sample, personal and geographic idiosyncrasies should disappear. Roughly speaking, the typical American lives and works in typical economic circumstances.
But the polls don’t say that. People have a more positive view of their personal finances, and even their local economy, than they do of the national economy. Here are some recent examples:
A mid-May Pew Research Center poll found that 41% of respondents rated their own financial situation as “very good or good,” but only 23% rated the nation’s economic situation as “very good or good.”
Results like those found by Pew are fairly consistent across polls: In an April Gallup poll, 46% of Americans rated their own personal financial situation as “very good” or “good,” but only 24% said the national economic situation was “very good” or “good.”
Interestingly, as survey questions become more local, respondents’ ratings of the economy improve. In a Wall Street Journal poll of seven battleground states in March, 54% of respondents rated their state’s economy as “very good” or “good,” while only 36% gave the same rating to the national economy. Are these state economies really that different from the national economy?
Some polls show an even starker contrast between sentiment and reality. A Harris Poll conducted for the Guardian a few weeks ago found that 49% of Americans believe unemployment is at a 50-year high, 72% believe inflation is rising, and 56% believe the U.S. is in a recession. None of these assertions are true. The same poll also found 49% believe the S&P 500 stock index has fallen this year. A look at brokerage filings shows this isn’t the case.
Notice that this set of questions is about objective facts, not subjective opinions. The apparent errors in perception are large and not random. Rather, they all assert that the country’s economy is in much worse shape than it actually is. What’s going on here? Perhaps the clue lies in our survey results that show that people rate the economy higher when the pollster’s questions are more familiar to them.
Consider this analogy: I live in Princeton, New Jersey. If you ask me how the weather has been here lately, I can answer accurately. (It’s hot!) If you ask me about the state as a whole, I can still answer pretty accurately, forgetting that it’s cooler along the coast. But if you ask me about the weather in Oregon, or even closer to home, Michigan, I probably wouldn’t have a clue unless the national news media reported on the terrible weather there and prompted me. Bad weather news spreads.
A similar phenomenon may be distorting people’s assessment of the national economy. People know from direct experience that their own situation is in fact quite good, and is getting better, in many cases. They also have direct experience with their local and state economies, many of which are doing well. But they have no direct experience with the national economy; it’s an abstract concept. What people believe about the national economy comes from the media. And media coverage is negatively biased.
With a Democrat in the White House, Republicans are more likely to have a negative view of the economy than Democrats, and it’s tempting to blame right-wing media. But the negativity bias is apparent across media channels of different political leanings. This negativity isn’t new, but it seems to be intensifying. A news report study by the Brookings Institution found that “sentiment on economic news has moved increasingly away from fundamentals and more consistently in a negative direction since 2016 and especially since 2021.”
If negativity bias is truly getting worse, that’s a problem. As the late Senator Daniel Patrick Moynihan said, people are entitled to their opinions, but they are not entitled to their facts.
Blinder is a professor of economics and public policy at Princeton University and served as vice chairman of the Federal Reserve Board from 1994 to 1996.
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