Recently, we’ve seen news about how the economy isn’t doing well. Yet, on the other hand, reports show packed tourist destinations, sold-out tickets, and massive traffic jams during the long weekend. On Indonesian social media, many have pointed out this contradiction: "If the economy is down, why were train, bus, and plane tickets fully booked last weekend?" In another example, someone shared content saying they didn’t believe the economy was struggling because they spent time in front of an iBox (Apple reseller) and observed multiple transactions happening within just a few hours.
How can these anecdotes be explained? This is a classic example of how cognitive biases and generalisation errors shape our perception. Let’s unpack this with some insights from the IRIS Global Consumer Confidence Survey 2024.
Availability Bias: Why We Think Holidays Are Still Booming
Availability bias occurs when we rely on information that is most easily remembered or frequently encountered to form conclusions. In this context:
- Media often highlights traffic jams, sold-out tickets, and crowded tourist spots.
- Personally, we may have experienced difficulty finding tickets or long waits during travel.
- Viral content, like someone observing transactions at an Apple reseller, creates a misleading perception that high consumer spending is widespread.
However, according to data from the IRIS Global Consumer Confidence Survey 2024, the net sentiment of Indonesian consumers for travel and tourism is -9%. This indicates that more people are cutting back on spending in this category than those increasing it. Among Indonesian Gen X, the net negative sentiment reaches -38%, suggesting that this generation is significantly suppressing spending on holidays.
Hasty Generalisation: Drawing Conclusions from Limited Examples
Seeing crowded tourist spots or transactions in premium stores, we might be tempted to conclude that the economy isn’t as bad as reported. However, the data tells a more nuanced story:
- Categories such as travel and tourism, dining out, and entertainment (e.g., concerts, movies) are experiencing significant declines in Indonesian consumer sentiment.
- The net sentiment for entertainment is -13%, with Indonesian Gen X recording the highest negative sentiment (-42%).
This highlights that while some people may still be travelling or spending on premium products, many others are cutting back on leisure activities due to economic concerns.
Perception vs. Reality
This phenomenon reminds us not to rely solely on perception without validating it with data. Information that is easily accessible (e.g., viral news about holidays or anecdotes about store sales) and logical errors (e.g. generalising from a small sample) can mislead us.
To truly understand economic dynamics and consumer behaviour, businesses need to rely on comprehensive research and data.
At Illuminate Asia, we are committed to helping our clients gain accurate consumer insights, especially in challenging economic times. If you’d like to access the full IRIS Global Consumer Confidence Survey 2024report or discuss how these insights can benefit your business, contact us today on [email protected]