Darwinian Gale

I suppose that by now you’ve heard last week’s news that smoking among U.S. adults was up in 2008 versus 2007, the first year-over-year increase in smoking in 15 years.   My first thought when I heard this news was that it was clear evidence of the stress and strain people are feeling because of this recession.  But then I thought about it and realized that that just couldn’t be right, that it couldn’t be that simple.

Percentage of "current smokers" among adults 18+ (National Health Interview, 1998-2008)

For one thing, this 15-year period of consecutive annual declines in the percentage of adult smokers includes the 2001 recession.  While, admittedly, not as severe as this recession, it was a difficult time for a lot of people and the recovery afterwards was long, sluggish and jobless.  It was stressful.  So if smoking and economic anxiety were strong correlates, smoking should have ticked up then.  But it didn’t.

Indeed, it turns out that recessions do not lead to worse health.  Studies have found consistently that overall health actually improves during economic downturns.  A recently published study found that during the Great Depression (1929-1932) death rates declined and life expectancy increased.  In fact, this has been true during downturns in all developed countries, as another recently published review of prior research documents.  It seems that being out of work literally keeps people from (over-) working themselves to death.  Less work means more time for family and fitness, which boost health.  Plus, less work means less income, and with less money people are forced to cut back on drinking alchohol, overeating and, yes, smoking, all of which worsen their health.

Of course, let’s not carry this too far.  There are lots of caveats to these findings that qualify any policy implications.  And other things like suicides and homicides go up.  Nevertheless, the broad findings from this body of research is clear – in developed countries, health is not improved by economic growth.  Instead, good health is the consequence of sound health policies and social safety nets, irrespective of whether a developed country is rich or poor, expanding or contracting.

But maybe this recession is different.  For one thing, many people – more, it seems, than in the past – are falling through safety nets in ways that could put their health at risk.  Food security in the U.S. has worsened significantly.   And the combination of little or no savings and high levels of debt means that 40% of U.S. families (and nearly two-thirds of African-American and Hispanic families) lack sufficient assets to cover basic household expenses if the breadwinner becomes unemployed.

Additionally, and more to the point of consumer marketing rather than public policy, people don’t seem to be doing less of the things that are deleterious to their health.  In the U.S., smoking went up from 2007 to 2008.  And in the U.K., the reported consumption of comfort food has increased at a rate that corresponds to an additional pound of weight per month (assuming the level of exercise stays the same).

However, for these counter-trends of more smoking and more consumption of fattening foods to be rooted in stress caused by this recession (rather than, in the case of food, less income and therefore no choice but to buy cheaper food), there must be more stress felt by consumers.  But the evidence on stress is mixed, and, if anything, points to low or no stress.

We’ve been pointing this out to clients ever since the financial crisis ensued last fall.  Our Dollars & Consumer Sense tracking has shown high levels of economic anxiety, yet our MONITOR tracking has shown undiminished optimism and happiness.  This was validated by the first wave of the Pepsi Optimism Project reported late last fall that found nearly universal optimism among consumers under 30 (so-called Millennials).  This was further validated by January results from a CBS News/New York Times survey showing that 61% were optimistic about the future compared with just 46% in 1979 during another economically challenging time.  In other words, notwithstanding worries about their finances today, people remain hopeful about the future, as well as happy today notwithstanding diminished finances.  And now, many months after we first saw and reported this, Time magazine has finally realized it, too, with a story this week about the so-called “happiness paradox.”

So, given all the smoke (-ing), where’s the fire?  Or when it comes to all those additional smokers, why are they lighting up?  It’s hard to say.  Smoking is correlated with lower levels of happiness, as a recent report from the Gallup-Healthways Well-Being Index shows.  But it’s worth noting that while these data show that smokers are less happy, they do not show that smokers are unhappy.  In fact, the aggregate level of reported happiness among smokers is high, just not as high as that of non-smokers.

The bottom line for marketing, though, is to recognize that consumers continue to look up even in the middle of the worst recession since the 1930s.  Lots of things, like the year-over-year rise in smoking, might suggest otherwise, but such interpretations are wrong.  The truth is that optimism is what people want to connect with in the unfolding recovery consumer marketplace.  Optimism not resignation, happiness not despair, is what people are feeling.  So, marketers must not be misled by hasty, superficial misreadings of the consumer mindset.  Consumers continue to dream, aspire and push ahead, and, as discussed in A Darwinian Gale, this means undiminished opportunities for innovation, growth and brand-building.  [J. Walker Smith]

[Update, 11-20-2009.  Thanks to Alex in Comments below where he properly and correctly cautions us not to read too much into this year-over-year shift because, as the CDC notes in its report, the change from 2007 to 2008 is not statistically significant.  Even so, this shift worries observers and anti-smoking groups for two reasons.  First, while year-over-year changes are often statistically insignificant, this is the first year-over-year change since 1994, significant or not, that went up, so they fret that it portends a reversal, especially since, second, 20.6% represents no change since 2004 when it was 20.9%.  My point about smoking in this post is that it might be supposed that this potential reversal or this flattening of declines can be attributed to stress from the recession, which leads us to the bigger issue of how this recession has affected people's anxiety, stress, happiness and optimism.  This takes me to my main point, which is that marketers should focus on people's enduring optimism and not be misled by phenomena that might (incorrectly) suggest otherwise.]