A recent research project between the Franklin Templeton mutual fund company and Gallup organization, looked to find out how peoples behavioral response to the COVID-19, coronavirus pandemic could impact perceptions of risk, decision making processes and the impact of these on the economy. What they found was shocking to say the least.
There were at least three powerful and somewhat surprising initial insights from the Economics of Recovery Study sponsored by these two organizations.
1) Americans misperceive the risks of death from COVID-19 for various age groups by WIDE margins.
2) These misperceptions are driven by both where people get their news and information from (mainstream news versus social media), as well as their political leanings, left or right.
3) These misguided perceptions of risk are driving both social activity and economic decisions. They could also have a significant impact on future inflation as the economy recovers.
Based on the study, Americans apparently still dramatically misunderstand the risk of dying from COVID-19. The study indicates that people believe that Americans age 44 and younger account for about 30% of the total COVID deaths, while the actual figure is 2.7%, more than 90% lower. A chart from these findings is included below.
Interestingly, the study also notes that people who get their information predominantly from social media outlets have the most erroneous and distorted perceptions about the actual risk of the virus. Unfortunately, this does not surprise us in the least. There are also some very interesting and critically important observations made in the study about the behaviors of people based on their political leanings.
People who make fear-based decisions tend to engage in life less. They eat out, shop and travel less often and spend less money. This will have direct consequences to gyms, barber and beauty shops, retail establishments and restaurants that are all struggling to survive. They are all hoping that their clientele continue to support them while we wait for a vaccine to make more normal life safer again.
We at Impel Wealth Management find studies like this fascinating. We want to keep you informed so that you can make the best decisions for you and your family. If you would like to read more about this study, please click the link below to see a summary of the research project entitled They Blinded us From Science. We think it is worth your time to read. Please let us know if you have questions about this or other issues, as we all try to keep "Moving Life Forward" in these unusual and complex times.