Trump is playing to one of the most powerful emotions in our economic life—what behavioral economists call loss aversion. The basic idea, which was pioneered by Daniel Kahneman and Amos Tversky, is that people feel the pain of losses much more than they feel the pleasure of gains. Empirical studies suggest that, in general, losing is twice as painful as winning is enjoyable. So people will go to great lengths to avoid losses, and to recover what they’ve lost.
Trump’s emphasis on losing is unusual: even in bleak times, American Presidential candidates tend to offer optimistic messages. But it has worked for him, because it resonates with what many Republican voters already feel. A study by the Pew Research Center last fall found that seventy-nine per cent of those who lean Republican believe that their side is losing politically. A rand survey in January found that voters who believed that “people like me don’t have any say about what the government does” were 86.5 per cent more likely to prefer Trump. Trump supporters feel that they, and the country, are losing economically, too. In the rand survey, Trump did better with the people who were the most dissatisfied with their economic situation, and exit polls from the Republican primaries show that almost seventy per cent of those who voted for Trump said that they were “very worried” about the state of the economy—as against only forty-five per cent of all voters in Democratic primaries.
There are a couple of surprising things about all this. The first is that, in objective terms, plenty of Trump supporters haven’t lost that much. We’re familiar with Trump’s appeal among white working-class voters, many of whom truly have seen wages stagnate and jobs dry up. But the median Trump voter is actually better educated and richer than the average American, as Nate Silver recently pointed out. A key point of Kahneman and Tversky’s work, though, is that people don’t look at their status objectively; they measure it relative to a reference point, and for many Republicans that reference point is a past time when they had more status and more economic security. Even people who simply aren’t doing as well as they expected to be doing, Kahneman argues, feel a sense of loss. And people don’t adapt their expectations to new circumstances. A study of loss aversion by the political scientist Jack Levy concluded that, after losses, an individual will “continue to use the status quo ex ante as her reference point.” Trump’s promise is precisely that he’ll return America to that status quo ex ante. (“I love the old days,” he has said.) He tells his supporters that he will help recoup their losses and safeguard what they have.
James Surowiecki, “Losers!”, The New Yorker (6 & 13 June 2016), 42.