What Do Americans Actually Know about Economic Growth?

Taken together, only a small fraction of the public has a rough sense of economic growth over the last 50 years, at least as reported by standard government statistics. Since the economy generally does well in election years, citizens will regularly encounter strong economic news from government agencies, such as the personal income numbers above. Given that many citizens think incomes have not risen at all in the last 50 years, they may interpret the statistics they hear during the campaign—such as annualized income growth rates above 4%—as spectacularly good news.

Another excerpt:

I asked about the number of recessions the US experienced in the last 50 years…The actual number of recessions the US has experienced in the last 50 years is about eight: one in 1960s, two in the 1970s, two in the 1980s, one in the 1990s, and two in the 2000s. However, about 70% answered between zero and five, and 26% picked between zero and two. Only about 20% chose the correct range, which was 6 to 10. This misperception may help us understand why voters throw out incumbent presidents during downturns. When the economy happens to experience a downturn in an election year—as it did in 1980 and 2008—they see it as an unusual event with ominous implications, not realizing that recessions regularly occur. As a result, they may more often vote against the incumbent party.

That is Gabriel Lenz.  More at Model Politics.

One Response to What Do Americans Actually Know about Economic Growth?

  1. kevin p August 16, 2012 at 1:26 pm #

    Great point: capriciousness of voter preferences. Wish it wasn’t so… it nuures the incentive for the attack ads/mudslinging. If Voter took a more global or strategic view, the civility and debating issues may (re)emerge. Tossing out the incumbent in a period of economic downturn could be equated with repair service behavior, eloquently examined in Detrich Dorner’s book ‘Logic Of Failure.’
    “…Human Beings tends to assume that an action will yield a response immediately, or not at all. This is the way that we interact with the world on a daily basis, and we can become very confused when there’s a significant delay in the system’s response. Even when we recognize intellectually that a change is “in the pipeline”, we may struggle against the instinct to do more and oversteer rather than correctly sitting on our hands.”