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Introduction
In the age of the Internet and IT revolution information are often overloaded. People can access lots of data that sometimes duplicate figures and increase confusion. To the question “do you prefer statistics or indicators?” people tend to answer “indicators”. Etymologically an indicator is something providing indications, right directions. But indicators are also numerous and can give controversial messages. We are tempted to conclude that people are actually getting lost in this “ocean” of information. They are looking for effective, understandable and easily accessible indicators, but often they cannot find them. So, at the end they prefer following their opinions, beliefs, ideologies rather than making completely rational decisions as predicted by standard economic models.
This is the reason why through the Global Project on Measuring the Progress of Societies, the OECD is working with other organisations to launch an international survey on ‘What people know about the progress of societies’. This survey will investigate what people know about key economic, social and environmental progress. Its results could shed light on the effectiveness of official statistics in an information society and their use in decision-making processes. Moreover, the survey could provide some valuable clues for strengthening the statistics-knowledge-policy value chain.
The proposal of building an international survey on what people know about societal progress was presented at the 2006 OECD Workshop on Business and Consumer Surveys. The results of some preliminary analyses were discussed at the second World Forum on “Statistics, Knowledge and Policy”, held in June 2007 in Istanbul, within the session “What People Know about Progress”.
The relevance of information in the decision-making process is straightforward. The questions are: do people make well informed decisions? Are their decisions based more on ideology and habit or on official statistics? Answering these questions is crucial for policy-makers to better target policies and for statisticians to transform figures into real knowledge.
Statistical information plays also a vital role in shaping the expectations and behaviour of individuals, the operation of markets and the democratic process. Much less attention has been paid to what people - including politicians and government officials - actually know about the situation of their country and how such knowledge (or ignorance) influences public debate and policies. Recent literature on the relationships between public opinion, political choices and the functioning of modern democracies argues there are big differences in what society at large thinks and knows about key issues and the views of specialists, such as economists. This can have a serious negative consequence for democracy. It can lead to confusion and fragmentation in voting, a withdrawal from political participation, or even the abandonment of facts or evidence-based knowledge as the basis for policy making and public decisions.
[see more: “Statistic, Knowledge and Policy: what do we know about what people know?”]
History of the international survey on “what people know”
A “pioneering” study
The first ones to address these subjects were Blinder and Krueger, who presented in 2004 their NBER Working Paper on what the public knows about economic policy and how it knows it. Starting from an analysis of the determinants of public opinion, they moved to the presentation of a survey on the people’s knowledge of US economic policy indicators. Moreover, they studied the demand for economic information and their determinants. They also investigated what are the main sources of economic information in US. Another interesting result of their analysis regards the reasons for wanting to be informed. The highest percentages of respondents saying yes refer to be responsible citizens (55%) and that information affects personal finances (54%). Moreover, more than 50% of the interviewed declare that to be informed is very important (3 in a 1-4 scale). Another important result is concerned about the impact of demographic characteristics, economic status and political involvement on the knowledge score.
[See the paper “What does the public know about economic policy, and how does it know it]
[Main results]
The CES-IFO World Economic Survey
In January 2007, the Munich-based IFO (Institute for Economic Research) and the Paris-based International Chamber of Commerce (ICC), on the OECD’S request, surveyed 700 economic experts from over 80 countries within the CESIfo World Economic Survey on the special question, whether the statistical information available for public and political decision making was adequate and whether more evidence was needed to provide a more holistic view of progress across countries. The survey is based on the World Economic Climate Index given by the arithmetic mean of the assessments of the general economic situation and the expectations for the economic situation in the coming six months. The following results deserve to be highlighted:
1) "While main economic indicators, such as GDP, inflation and public finance statistics (governmental debt) are usually well established, the political debates on environmental aspects, knowledge economy (research and education), as well as social conditions tend not to be well grounded on statistical evidence around the world".
2) There are quite significant differences at a regional level: in North America we can observe a broad difference between assessments of the current situation and the expectations about the coming six months. Conversely, for CIS countries since 2000 assessments are in line with expectations (see the graphs). For all regions we observe an increase in the Economic Climate Index in 2007, especially concerning the evaluation of the present situation.
[See more: “CESIfo World Economic Survey”]
First Results from Italy on What People Know About Progress
In March 2007 the ISAE (Istituto di Studi e Analisi Economica) carried out a first survey in the first week of March 2007 with the collaboration of the OECD. The scope was to investigate the level of knowledge and awareness of the basic economic figures by Italian consumers, adding some specific questions to the questionnaire normally used in its monthly survey on Italian consumers. In particular, the additional questions concerned the extent to which consumers know the official statistics regarding GDP growth, inflation rate, unemployment rate and the public deficit/GDP ratio, the channels by which they receive this type of information, the importance of knowing this information and the desire of being more informed. Moreover, the study provided estimates of the impact of several demographic and personal characteristics on the level of knowledge. One of the most dismal results is the low response rate to quantitative questions on GDP (23.1%), Inflation (28.1%), Unemployment (32.1%) and Deficit/GDP (12.7%).[see more figures]
[See the paper “What do citizens know about statistics? The results of an OECD/ISAE survey on Italian consumers”]
[see the ISAE paper for the Third Joint European Commission-OECD Workshop on International Development of Business and Consumer Tendency Surveys]
[Main results]
[see the questionnaire]
Eurobarometer Survey about Europeans Knowledge on Economic Indicators
In April 2007 another survey was coordinated by the Directorate General Communication of European Commission with the assistance of the OECD. The survey was conducted between 10th of April and 15th of May under the framework of the Standard Eurobarometer 67. For the first time a study about the perception and the evaluation of economic indicators by European citizens has been implemented. It is focused on three main indicators: growth rate, unemployment and inflation rate. An interesting outcome of the analysis is the strong correlation between the European citizens’ trust in official statistics and the fact that political decision are made on the basis of statistical information (see more). So, it is crucial to foster a better communication of official statistics to help people make well-based decisions, by using more micro and longitudinal data, expand the analytical capacity and exploit new technology to engage citizens and create powerful networks. Finally, even if 70% of European respondents consider that it is important to know this economic data, 62% consider that political decisions are made on the basis of statistical information. No more than 46% of EU citizens trust official statistics.
[See the paper in PDF “Special Eurobarometer: Europeans Knowledge on Economical Indicators”]
[some graphs] [see the questionnaire]
Evidence from United States
Another work was presented in June 2007 by Richard Curtin from the Survey Research Centre at the University of Michigan. He analysed the U.S. consumers’ knowledge of official economic statistics, starting from two departures from the standard economic models of information. The
1. Staggered updating: collecting and processing information is costly and sometimes not accurate.
2. Relevant Information: people tend to collect more information about what matters for them.
The survey provides evidence on people’s knowledge of official measures of economic performances, demographic determinants of knowledge, people’s willingness to be informed and main sources of information on official rates of unemployment, consumer prices and Gross Domestic Product.
The most important results (showed in the graphs below) are the quite low response rate (Unemployment 34%, CPI 20%, GDP 17%) and the slow percentage of people considering it as important to be informed. Relatively high are also the rates of citizens who have never heard about these basic economic indicators by official agencies (Unemployment 23%, CPI 34% and GDP 40%).
[see the paper “What US Consumers know about Economic Conditions”]
[Some graphs] [see the questionnaires: 1 - 2]
Additional information
You might also want to check some important work in the area of what people know:
Disagreement about Inflation Expectations
The Demographics of Inflation Opinion Surveys
The Curiously Different Inflation Perspectives of Men and Women
Dutch households' perceptions of economic growth and inflation
The Epidemiology of Macroeconomic Expectations
Consumer Sentiment, the Economy, and the News Media
Contributing to the survey
We are currently looking for partners contributing to the survey. The results are expected to be presented at the Third World Forum about Statistics, Knowledge and Policy in 2009.
If you would like to participate at the project please contact oecdworldforum@oecd.org.
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