The psychological impact of the recent state of economic affairs cannot be underestimated.
In the first three days of the country’s economic meltdown that began Sept. 29 2008, 81 percent of Americans surveyed in a national poll agreed or strongly agreed that the financial crisis “poses a greater threat to the quality of my life than does the threat of terrorism.”
And researchers found little trust in the government and even less in business leaders.
On a personal level, 41percent of the 802 respondents were very angry about the current financial challenges and 32 percent were moderately angry.
Respondents were similarly fearful, worried, and sad. Only 19 percent felt they could adjust to what happens because of the financial crisis; 51 percent said they had no or only slight influence for controlling the impacts on their lives.
Seventy-eight percent expect to postpone major purchases (large appliances or cars).
The survey was conducted by a five-member team, including three researchers with University of Oregon appointments, by Decision Research, a think tank for risk assessment based in Eugene. Additional surveys of the same participants will continue.
Asked a series of questions to gauge who participants trust to meet the economic challenge, respondents gave no one a firm endorsement.
Democratic presidential candidate Barack Obama received the highest nod, but at only 23 percent. His Republican rival John McCain drew 16 percent of their trust. Support of President Bush, Congress and the Treasury Secretary Henry Paulson ranged from 5 percent to 7 percent. Business leaders drew only 2 percent.
The five researchers are William Burns, consultant to the Department of Homeland Security’s Center for Risk and Economic Analysis for Terrorism Events and lecturer at California State University at San Marcos; Ellen Peters, senior scientist at Decision Research and courtesy psychology professor at the UO; Paul Slovic, president of Decision Research and UO psychology professor; Martin Tusler of Decision Research and the UO’s department of planning, public policy and management; and C.K. Mertz of Decision Research.
“The current financial challenges in the United States represent a unique opportunity to study public risk perceptions and risk-related behaviors in the midst of an on-going economic crisis that threatens the quality of life of a wide spectrum of Americans,” Burns said.
“Few emergencies within the United States have affected so many people.”
Researchers began their surveys at 1 p.m. (Eastern), Sept. 29, as the Dow Jones industrial average was in its biggest one-day decline in decades.
Polling continued through 1 p.m., Oct. 1. Participants are on a 1,000-member national panel maintained by Decision Research; members participate in web-based surveys on a continuing basis. While not a random sample, the panel includes a broad cross-section of the people across the United States.
Eighty percent of the panel members, mean age of 39, participated; 71 percent were women and 79 percent were white/Caucasian; and 41 percent hold college degrees. The median annual income of responders was about $50,000. Thirty-nine percent listed their political party affiliation as Democrat, 21 percent as Republican, 20 percent as independent and 17 percent as undeclared. Respondents were 49 percent conservative and 50 percent liberal.
Almost half (48 percent) of respondents had investments in stocks or mutual funds; another 4 percent planned to invest in stocks and mutual funds in the next 12 months. Of these respondents, 31 percent said they were very likely or likely to change their investments during the next week to reduce their financial risk. When asked what they expected their average returns to be over the next year, 27 percent expected a negative rate 9 percent expected zero or no return, and 67 percent expected no more than 5 percent.
When the same questions were asked by Decision Research during the bear market of March 2001, expectations were far more optimistic even though the market declined 69 percent during the year.
Source: University of Oregon