Why Calgarians' perceptions of the economy are 'more negative than the reality'

How's the economy doing? That depends entirely on who you ask.

Ask an economist; they'll look at the data and tell you things have been generally, but not universally, improving.

Ask a lot of Calgarians; they'll look at their own lives and say they're not buying it.

That's according to an extensive public-opinion survey from researchers at the University of Calgary, who asked hundreds of people detailed questions about themselves and their views in late 2017 and then followed up with the same people a year later.

• Scroll down for interactive charts showing Calgarians' views by age, gender and political affiliation

One focus of the study was how people perceive the state of economy a topic that carries some heavy implications for the upcoming provincial election. And, while most Calgarians see it as getting worse, not everyone agrees.

There are some big differences in how we see things depending, in particular, on our political views. Things like our age, our gender and our level of education also play a role in what we tend to believe. And those beliefs often stand in contrast to the available evidence.

This is a paradox: beliefvs. data.

In general, researchers say things aren't as bad as most Calgarians think they are. But the way weperceive theeconomy (in spite of how it actually may be) can still play a role in policy decisions at every level of government. And, as we'll hear from one energy economist, it can affect the private sector, as well.

By looking at who believes what, we can learn a bit about where our perceptions come from.

Improving indicators, souring mood

Let's begin in 2017.

The data showsit was a pretty good year. Alberta led the country in GDP growth.Employment increased. Average earningsgrew. Retail sales hit new highs.

In spite of that, only about one-in-five Calgarians felt the city's economy had improved. A third said things had stayed about the same. And nearly half believed things had gotten worse.

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Jack Lucas, who led the survey research for the University of Calgary's School of Public Policy, says it's clear that people's perceptions don't always match up with the available evidence.

"The perceptions are more negative than the reality," he said.

When the survey was conducted again in late 2018, Lucas says the results were similar.

While the data showed economic growth had slowed in some areas but was still strong in others, Calgarians' generally believed it had gotten a lot worse.

That was especially true among older Calgarians and those with particular political views.

Click or tap on the interactive chart below to see how Calgarians' opinions of the Calgary economy vary by age, gender, and political affiliation:

(Can't see the chart? Click here for a version that should work on your device.)

As a political scientist, Lucas said the stark differences along ideological lines really jumped out at him.

It seems clear, he said, that the survey respondents' beliefs had more to do with "political coalitions" than "who is doing especially well or poorly" in the current economy.

Economic perceptions 'coloured by politics'

In 2017, for instance, more than half of NDP supporters said the economy had improved, while another quarter believed things had at least stayed the same. Only about one-in-five thought the economy had gotten worse.

That level of optimism dipped in 2018 butstill, 68 per cent of NDP supporters believed the economy was steady or improving that year.

Among UCP supporters, perceptions were much different, with 71 per cent saying the economy had gotten worse in 2017.

In 2018, that was up to 87 per cent.

Click or tap on the interactive chart below to see howCalgarians' opinions of the Alberta economy vary by age, gender, and political affiliation:

(Can't see the chart?Click herefor a version that should work on your device.)

Lucas said the disparities along partisan lines were "really striking."

"You can see that perception about the economy appears to be coloured by politics and partisanship," he said.

And the political divide even extends to perceptions of the national economy.

Views of Canada's economy, overall

Calgarians, overall, were pretty evenly split in 2017 about how the national economy was doing.

Roughly one-third thought it was improving. Another third thought things were staying about the same. And a final third thought the economy was getting worse.

But, again, NDP supporters were far more optimistic, with 57 per cent saying things were getting better.

By contrast, just 16per cent of UCP supporters felt the same way.

Click or tap on the interactive chart below to see howCalgarians' opinions of the national economy vary by age, gender, and political affiliation:

(Can't see the chart?Clickherefor a version that should work on your device.)

But political affiliation isn't the only interesting variance in perception.

If you've been clicking around on the above charts, you've probably also noticed that perceptions of the economy vary a lot by age, as well.

In general, younger people express more economic optimism at the local, provincial and national levels. This is particularly interesting given that many young people are facing some of the most difficult challenges in Alberta's current economy.

The age paradox

Young workers in particular young men not only experienced some of the heaviest job losses during the last recession, they also have yet to experience the recovery that has since arrived in so many other parts of the economy.

"The share of workers in Calgary under the age of 25 that is employed is lower now than at any point in at least the past 30 years and that's really just as far back as we have data," said University of Calgary economist Trevor Tombe.

"That employment rate is just getting worse. So, for them, I think it is fair to say the economy is getting worse."

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And yet, paradoxically, younger Calgarians express the most positive perceptions of the economy by far.

In 2017, people aged 18 to 34 were more than twice as likely to say the economy was improving, as compared to those over the age of 65. By 2018, young people were three times as likely to see the economy as being on a positive trajectory.

"I'm not sure what to make of that," Tombe said.

He also noted a smaller paradox in the male-female splits.

In general, Tombe said, women were slightly more pessimistic about the economy than men, even though female workers effectively enjoyed "all the employment gains" in the province last year.

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It's not clear exactly why these paradoxes might be, but Tombe believes it might relate to the "uneven" nature of the economic recovery so far, and the way that people judge the economy by looking at those around them.

"The recovery is being experienced by different groups in different ways," he said.

"And so, perhaps, the negative response we're getting in the polls is because people have friends or family or spouses or kids who are not recovering or are still unemployed and that's leading them to respond that the economy is getting worse, even though for them (personally), it is not."

As to why young Calgarians are so relatively positive, in spite of their economic struggles, Tombe could only hazard a guess.

"There's an interesting political or psychological question here," he said. "Maybe young people are just more optimistic about their future and, though their employment rates now are low, they're anticipating that to recover."

With an election looming in Alberta, Lucas said the survey results come with some "obvious implications" for provincial politics.

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"It's pretty clear from a long tradition of research in political science that perceptions of the economy are related to vote choice," he said.

"At least from a Calgary perspective, it's not good news for the incumbent party."

In the private sector, meanwhile, Calgarians' negative perceptions about the economy in spite of evidence to the contrary comes as a concern to energy economist Peter Tertzakian.

The 'dangerous' side of too much pessimism

Tertzakian, executive director of ARC Energy Research Institute, told a gathering organized by the Calgary Chamber and hosted by CBC Calgary last week that it can be counterproductive to be overly pessimistic about the local economy.

He expanded on his view Monday on the Calgary Eyeopener, where he noted the economic recovery has been well underway for some time now, but you wouldn't know it talking to some people in this city.

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"You don't hear that message because it's drowned out by the the negative, which is certainly, I think, psychologically always something that comes out to the fore," Tertzakian said.

There's a common misperception, he added, that the economic challenges we do face stem entirely from local and national policies. And that, if only we could get a new pipeline built, everything would suddenly change. While the lack of pipeline capacity is a real issue, he said, so too are broader disruptions in the industry that go well beyond Alberta's or even Canada's borders.

"What's dangerous is we're being programmed into believing that the government is the root of all our issues," he said.

"We can't take our eye off that, because if you magically build a pipeline, get rid of the carbon tax, etc., and all the things that are creating emotion, it doesn't mean the competitiveness angle is going to be addressed."

Overall, Tertzakian believes Calgarians and Albertans, in general "have every reason to be optimistic" about the future.

"But I don't want to sugarcoat it," he said.

"I think the next two to three years are still going to be really tough. It's this disruptive period of turmoil with a cocktail of technological change, social issues and geopolitics all wrapped together. But as we head into the 2020s, I think there's every reason for optimism."

How the survey worked

Lucas's research was part of a larger project called theCanadian Municipal Election Study, which included a survey of Calgarianscarried out by Forum Research from Sept. 28 to Oct. 15, 2017. That was followed up by a similar survey carried out by the same firm from Nov. 14 to Dec. 13, 2018.

Respondents were contacted by phone and those who agreed to participate completed the in-depth survey online, answering a range of questions about themselves and their views on a wide range of issues.

Of the roughly 2,000 people who participated in second survey, 748 had also participated in the first survey.

This analysis is based on the views of those 748 respondents, Lucas said, allowing researchers to track with a high degree of specificity how people's views changed from one year to the next.

The marginof error on the sample of 748 people is plus or minus 3.6 percentage points, 19 times out of 20. Margins of error are higher demographic breakdowns. More detailed data and notes on the methodology are available here.

Calgary: The Road Aheadis CBC Calgary's special focus on our city as it passes through the crucible of the downturn: the challenges we face, and the possible solutions as we explore what kind of Calgary we want to create. Have an idea? Email us at calgarytheroadahead@cbc.ca

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