Fun with the Gallup survey on “standard of living”

In economics, the term “standard of living” generally corresponds to something like real income.  A recent Gallup survey asked people about their standard of living, and Matt Yglesias and Karl Smith drew some inferences that seem to go way beyond the data.  Here’s Matt Yglesias:

What you’re seeing here is that being unemployed or being seriously poor is terrible. We ought to be working like crazy to reduce the number of people in that position.

Karl Smith makes this observation:

Losing your job is on par with losing your marriage in terms of life satisfaction. Being poor doesn’t trail far behind. These are tragedies of human suffering and they deserve our attention.

Just so I don’t get accused of insensitivity, I don’t doubt that being poor and/or unemployed is very unpleasant.  So I’m not really questioning their conclusions, or even their policy proposals (I also favor progressive taxes, monetary stimulus, etc.)   I just don’t see how they can reach any conclusions based on this survey.  It’s not clear whether the survey is asking “are you poor?” or “does is suck to be poor?”

But let’s say I’m wrong and they’re right, that these results are meaningful.  I’m willing to play along.  So let’s look at some of the results they reported, and some they didn’t report:

Category      Standard of Living:

Everyone                  33

Young (18-29)          64

Hispanic                    44

Democrat                  36

Black                         36

Republican               33

White                        31

> 65 years old         23

50-64 year old        17

< $24k income        14

unemployed              8

What can we make of this?  There is extensive research on happiness, and this doesn’t really seem consistent with the results.  Old people are actually pretty happy.  And look at the gap between the below $24,000 and age 18-29!?!?  There is massive overlap between those two categories.  I’m not saying the gap is impossible, but there is certainly something strange going on.  There’s also a big overlap between poverty and being non-white.  Yet minorities report relatively high living standards.

Are we to take seriously the gaps between the races?  I can’t imagine many progressives looking at this and arguing that we need to close the standard of living gap between blacks and Republicans, or hispanics and whites.  So how can we take any of it seriously?

BTW, Mexico scores relatively high on international happiness rankings, and that might explain part of the anomalous result for hispanics.  But I am also pretty sure that whites usually score higher than blacks in America, so I’m very suspicious of that reported gap.

To conclude, what did I know about inequality before reading the posts by Yglesias and Smith?  That poverty and unemployment suck, and policymakers should try to do something about it.  And what have I learned from reading the survey they link to?  Not very much.

Maybe that’s unfair, if I try to do partial derivatives in my head perhaps I’ve learned that it really, really, really sucks to be a 58-year old poor white Republican.

PS.  Both Yglesias and Smith discuss the standard of living question.  Interestingly, Gallup also reports results from a “satisfaction” question, which gives very different results for some groups, but not others.  Both bloggers talk about the survey results as if they are “life satisfaction” results, even as they focus solely on the standard of living question.  In fairness, the worst off heavily overlap, so their conclusions wouldn’t be strongly affected.  It’s just odd that they focused on the question with the really weird results.

Tags: standard of living

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