Fisher Investments Editorial Staff
Investor Sentiment, US Economy

Survey Says

By, 08/26/2008

Story Highlights:

  • Inherent kinks in human behavior can skew sentiment-based survey results.
  • Happiness survey trends do no more than highlight our own interpretation of our happiness—at best a subjective and fractured understanding.
  • More often than not, surveys just don't capture the complete picture because we humans can't provide a complete answer.
  • Those in the political and financial industry are wont to quote from survey and poll results to paint the economic outlook they want. But even if results weren't nitpicked, they still wouldn't provide a clear image.

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Humans have varied pursuits in life: bringing home the gold, collecting Star Wars figurines, appearing on reality TV, and perhaps the mother lode of them all, happiness. Many believe happiness is the end goal of human behavior, dictating decision-making at every turn. Perhaps that's why the study of happiness has become a holy grail for economists and politicos, and a popular topic for polls and surveys.

But just as economists and politicians are no closer in their quest to find the answers to our happiness, polls and surveys never truly capture the complete picture. The culprit behind the mission miscues may very well be the subjects: Us.

Survey subjects do not plot to fool surveys, but inherent kinks in human behavior can skew results. Researchers finding stagnating trends in US life satisfaction surveys are quick to assume we are no better off than we were 50 years ago. But survey results typically measure happiness levels at pinpoints in time rather than relatively through the years.

As a result, trends captured by happiness surveys do no more than highlight our own interpretation of our current happiness—at best a subjective and fractured understanding. Studies show humans adapt to happiness. We acclimate to varying levels of happiness by making each new level the status quo—much like eyes adapting to a darkened room. The new and the better become the ordinary and the standard—and we quickly lose our perspective and even our enjoyment.

Moreover, our perception of happiness is often clouded by comparisons with the recent past, our current situation or emotional state, what we believe would make us happy, and many other subjective factors. Global surveys often compare levels of happiness among countries, but what do these results really prove? A recent World Values Survey named Colombia as the world's third happiest country. But we would guess, despite the ranking, the US (in 16th place) fields far more immigrants than Colombia. Why do immigrants flock to the US and not Colombia?

Colombia, fresh from decreased crime and increased economic growth, probably has plenty to be happy about relative to yesteryears, but would people be happier living in Colombia than in the US or Iceland (4th) or Switzerland (7th)? What about in two years or 10 years in the future? We don't know the answers, nor do we know anyone who does. But this highlights the futility of happiness surveys and polls. More often than not, surveys just don't capture the complete picture. But then again, we humans can't provide a complete answer.

Those in the political and financial industry are wont to quote facts and figures from survey and poll results to paint the economic outlook they want. But even if results weren't nitpicked, they still wouldn't provide a clear image. The Consumer Confidence Index is due out later today and you can be sure it will make headlines. Economists and the Street are closely watching, but we'll be happier ignoring the results.

*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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