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Big corporations are more popular than you might realize

Robin Hanson writes, “people tend to like cities more than firms . . . people tend to dislike bigger firms more than small ones, cities tend to be bigger than firms, and the biggest cities tend to be the most celebrated.”

Hansen goes on to consider explanations (involving “the joy of sometimes dominating,” etc.) but ends up describing himself as confused.

One reason he might be confused is that, at least in the data I’ve seen, people don’t dislike big corporations—at least not when the corporation is named.

Consider some survey data from 2007:

OK, sure, now that there’s a recession on, Citibank probably doesn’t have 78% approval anymore. Still, these companies are pretty damn popular. You might think lots of Americans think Starbucks is stuck-up? Nope. 79% approval. Pfizer? 77%. I have no idea why Target is so much more popular than Walmart, but in any case all these numbers (with the exception of oil-spillin’ Exxon and war-profitin’ Halliburton) are stratospheric.

I don’t know if there are approval ratings of cities, but I doubt that NY, Chicago, LA, etc. (not to mention Washington, D.C.!) would be up there in the 70-80-90% range.

Of course, liking or disliking a city is much different than liking or disliking a corporation. I don’t really know what such a comparison would mean. But based on the polls, corporations appear to be quite popular, so I don’t think Hansen needs to be so confused as to why they’re not!

P.S. I don’t knock Hansen for not realizing this; before I’d seen the poll data shown above, I would never have guessed that that Citibank, Microsoft, Starbucks, etc. were so popular.

24 Comments

  1. Jonathan says:

    Andrew quick clarification, how was this asked on the survey. Also I am wondering whether a factor analysis can be done with these results. You can probably tease out some very interesting things about consumers. Finally can anyone explain the variability with the can’t rates? Survey data tends to have the same people unable to rate things (if I skip one I skip them all). But here there seems to be a lot of change. Anyone have any ideas?

    • Andrew says:

      Jonathan:

      Here’s the item (from the linked Pew report):

      I’m going to name some major companies. The first is [INSERT ITEM]. Is your overall opinion of [INSERT ITEM; RANDOMIZE; OBSERVE FORM SPLITS] very favorable, mostly favorable, mostly UNfavorable, or very unfavorable? How about [INSERT ITEM]? [INTERVIEWERS: PROBE TO DISTINGUISH BETWEEN “NEVER HEARD OF” AND “CAN’T RATE.”]

      There’s lots of interesting material there. People have some negative views about big companies in general, but positive views about the companies that are named.

      • Marmaduke says:

        Yeah, seeing this, I’d be curious to see how numbers changed if the list was not just companies, but included other things (cities, countries, nonprofits, puppies, apple pie, …)

  2. […] 4p: Andrew Gelman says many firms are actually very popular. Alas he doesn’t have comparable data on cities. GD Star […]

  3. Marmaduke says:

    Without any context, I would read this table as a relative rating. I, too, have a high opinion of many of these companies, but I still think there needs to be more pushback on them. I don’t know what exactly, but stronger trading regulations and antitrust laws jump to mind. If it’s too big to fail, it’s too big.

    I suspect people answering this survey were (to some extent) comparing them to other companies. I’d rate Whole Foods very high, but I would much rather find a nearby farmers’ market. Google does some wonderful things, but I’ve heard tell of some pretty dodgy accounting (like any other global company) to dodge corporate taxes.

  4. Shaun says:

    Maybe this is standard practice with favorability ratings, but it’s misleading to say that 77% of respondents have a favorable opinion of Pfizer (for example). Actually, 77% of the “Can Rates” have a favorable opinion, which is only .77 x (100-39) = ~47%.

    • Andrew says:

      Shaun:

      Yes, it’s standard practice to exclude the don’t knows. It depends on context, but generally I think it makes sense to report Yes/(Yes+No) rather than Yes/(Yes+No+DK).

      • Jonathan says:

        But Andrew again, I am concerned with the variability here of the don’t knows. Should we not impute for those who don’t give don’t knows for ALL of the companies (I alluded to this above). There might be some value that can be inferred here (and I hate imputing).

  5. I wonder if some of this has to do with evaluating a category versus a single instance of the category, especially when people have distinguishing information or a personal connection to the instance. For example, people tend to approve less of Congress than of their own representative (a href=”http://en.wikipedia.org/wiki/Fenno%27s_paradox”>Fenno’s Paradox</asource</a). The sinister attributes that people associate with the abstract idea of "a corporation" are very different than "the company that makes that thing I like." When you call up a single instance, the latter associations — which have been formed repeatedly and personally — probably overwhelm the former.

  6. Sebastian says:

    Isn’t this the case with many things in Public Opinion? People hate Congress, but like their representatives, people hate “the Federal Government” and “the Welfare State” but strongly support many of its programs, and people hate big Corporations, but like Google, Apple, etc. makes sense to me.

    • Andrew says:

      Sebastian:

      I guess it has to make sense, ‘cos it’s true, but I was still surprised that Citibank and Starbucks were so popular. Indeed, Hanson had thought that all sorts of big firms were unpopular, and I’d thought that everybody, left and right, hated Starbucks.

      • Jonathan says:

        Do you think any of these differences are significant are the better question (I know I am being a negative Nancy).

      • Sebastian says:

        Andrew – I agree some of this is quite surprising. Makes sense != is obvious.

        Also – it’s pre-financial crisis, I’d be surprised if Citibank were still up there, and I would guess along the lines of some other posters if you made an explicit comparison with other organizations, like
        1. Your neighborhood Coffee Shop
        2. The Supreme Court
        3. Starbucks
        lompanies would do much worse.

  7. Jonathan says:

    This also reminds me of a new PPP survey that was conducted on sources of information, where Fox News is the most trusted and least trusted (this is a victim of sampling most likely).

    http://www.publicpolicypolling.com/pdf/2011/PPP_Release_National_01171.pdf

  8. Mike says:

    “I have no idea why Target is so much more popular than Walmart”

    It should be pretty obvious for anyone that has ever been in a Target and a Walmart, I’d think.

  9. Mike says:

    I’d also argue that Starbucks is less popular now, 5 years after this survey. They have really saturated the marketplace, and I think they’re overexposed.

  10. A. Zarkov says:

    “I’d thought that everybody, left and right, hated Starbucks.”

    Why would you think “everybody” hates Starbucks? If that were true, they would be out of business as they don’t have monopoly power. Besides what’s to hate about Starbucks? A Starbucks is simply a coffee shop, not a bordello or a porn store. I think of a Starbucks as a modern-day version of the saloon. A place were people meet and relax. I’ve made business contacts and formed friendships with people I meet at a local Starbucks. Go into a Starbucks. Do the people look unhappy? The coffee is expensive, but no more expensive and often cheaper than other coffee shops– for example Peets. For some reason Peets escapes the opprobrium direct at Starbucks. Why I have no idea. Finally it’s not the right that hates Starbucks, but the misanthropic left, who simply hate success and business in general.

    • Andrew says:

      Zarkov:

      I don’t personally have any problem with Starbucks. I’ve just seen a lot of anti-Starbucks rhetoric on the left and the right. From the left, criticisms of Starbucks as corporate and evil. From the right, criticisms of Starbucks as yuppie and un-American. Or, as I wrote a couple years ago, “From the left, Starbucks is a creepy bit of corporate America, whereas the right sees the ubiquitous chain of coffee shops as a snobby overpriced slice of big-city liberalism.”

      Of course I didn’t literally think that “everybody” hated Starbucks. That was hyperbole. Neither “the left” nor “the right” hates Starbucks, but vocal people on both sides do.

  11. A. Zarkov says:

    Andrew,

    I’m in full support of your basic thesis here– big corporations are popular. However I don’t think it should surprise us. If they were unpopular, then would not survive the competition. Now people do seem to dislike their cable companies, at least that’s what the surveys say. And no surprise there because they have monopoly power. In my area it’s Comcast for Internet cable service or nothing. People do seem to hate them, but I have no trouble and am generally happy except for the price.

    I think the anger directed at Starbucks comes from a tiny, but vocal minority. I have not heard people on the right criticize them, but I’ll take your word for it. I’m simply expressing my lack of understanding as to why. I don’t see why Starbucks is “creepy” (whatever that means) and (say) Sears isn’t. The Starbucks stores are generally comfortable, and the employees pleasant and accommodating. I don’t see how anyone could describe that as “creepy.” If there is something bad about Starbucks then I’m anxious to find out what. I might agree.

    • Andrew says:

      Zarkov:

      My impression is that anti-Starbucks liberals don’t like it because they think Starbucks is driving out mom and pop businesses, and that anti-Starbucks conservatives don’t like it because it seems like a liberal thing. I don’t fully understand this, but somehow an expensive SUV is associated with conservatives, while an expensive coffee is associated with liberals.

      Also, Starbucks has a bit of a liberal vibe with fair-trade coffee etc.—this annoys liberals who feel that this is all just corporate P.R., and it annoys conservatives who feel that free trade coffee etc. is liberal B.S.

      At least, that’s my take on it. I don’t actually drink coffee myself.

  12. A. Zarkov says:

    I don’t actually drink coffee myself.

    Alfréd Rényi said,”A mathematician is a device for turning coffee into theorems.” (often attributed to Paul Erdős).