July 15, 2009

The Internet and the Recession

The impact of the internet

There are any number of ways to assess the impact of the internet during a big, ongoing event like the recession. Our survey attempted to get at some them. The response from the majority of online Americans is that their internet use had not changed much and the things they did online did not have tremendous influence on their beliefs and actions.

For instance: 76% of online economic users say their use of the internet has had no impact on whether to change jobs; 73% say their internet use has had no impact on helping them upgrade their job skills; 56% say they are going online for economic news at about the same frequency as they usually have; and 51% say their online activities have made no difference to their understanding of the nation’s financial crisis.

Still, a notable portion of online economic users – the 69% of adults and 88% of internet users who have gone online for economic-related purposes during the recession – have reported changes in their views and their actions:

        More worried, less confident: Asked whether the things they have learned online have made them more confident or more worried about certain things, more said they were made more anxious than the opposite. That is probably a reflection of the general tenor of public and private conversation about the state of the economy as much as it reflects the tone of online material itself:

  • 39% of online economic users said they were more worried about the stability of banks by what they read online, compared with 5% who said they were more confident. Some 54% said the online information made no difference in their views.
  • 37% of online economic users said they were more worried about the nation’s economic future by what they read online, compared with 10% who said they were more confident. Some 50% said the online information made no difference in their views.
  • 36% of online economic users said they were more worried about their family’s family future by what they read online, compared with 6% who said they were more confident. Some 56% said the online information made no difference in their views.

On a personal level, though, online economic users were not dejected after their online searches about their own ability to make good decisions about their finances and career. Some 17% said they were more confident about their ability after their internet searches and 14% said they were more worried, while 67% said their online searches made no difference to their views.

        Improved understanding: 36% of online economic users say the things they have learned online have improved their understanding of the nation’s financial crisis, compared with 11% who say they are now more confused because of what they have encountered online. Interestingly, those who have been hard hit during the recession are more likely than the unaffected to say internet information has left them more confused (13% vs. 8%) , while those unaffected by the recession are more likely to say their internet searches have improved their understanding (34% vs. 25%). 

    The online economic users who have college educations are more likely than those with high school diplomas to report their internet use has been helpful and those younger than 50 are more likely than older internet users to say the same.

        Going online more often: 31% of online economic users say they have been using the internet more often to get information about the economy in the past year. At the same time, 10% of online economic users say they are going online less. People’s economic circumstances do not appear to be a significant influence on whether they are going online more often or not. Those who rate the overall economic situation as “only fair” or “poor” are more likely than those with positive views to be going online more often (33% vs. 16%). Those who are employed are more likely than those outside the labor market to be checking on things more often (34% vs. 26%). Those who voted for Obama are more likely than those who voted for McCain to be logging on more often for economic updates (41% vs. 29%). And those under age 50 are more likely than older Americans to be logging on more often.

The flow of economic coverage on every channel is so abundant that some respondents cannot avoid near-constant exposure. Here is how one respondent to our qualitative online survey described things: “Usually heard about bailouts from online sources and TV.  Since the flow is so constant, I can’t really recall where I heard it first because it all blurs together — each builds on the other and it circles around and around as each piece or story grows.  Truthfully, I wouldn’t want only one source. I like the different levels of detail and the different perspectives from the different sources.  Also, magazines are good for the BIG picture summaries and analysis at different milestones.  Online gives the cliff notes, but detail comes from paper and TV news series — not the nightly news, but the analysts talking about a subject.”

Some people followed a mixed strategy of paying less attention to their personal finances but more attention to national news. A respondent to our online survey named Eliza explained her reaction this way: “I am hardly monitoring my personal financial situation now at all.  When I get letters in the mail that look like they contain statements from my IRAs and other accounts, I throw them out.  I’m not going to fix it, so why look at it?    I am, however, monitoring the general financial status of the country and world through NYTimes.com and WSJ.com and ABA.com – all of whom email me alerts.”

        Going on alert: 13% of online economic users have signed up to receive updates about general economic news or personal financial issues. Those hard hit by the recession in their job situation or investments are twice as likely to have signed up for alerts as those who have been relatively unscathed (16% vs. 8%). College graduates are more likely than those with high school educations to have arranged for economic alerts; as are those with wireless internet connections compared with those who just have wired internet connections.