Measuring the American Dream
Amit Sen, Greg Smith and Chris Manolis
Professors, The Center for the Study of The American Dream
Xavier University, Cincinnati
Several years ago, three Xavier University professors set about creating a numerical value to measure the American Dream.
But first Amit Sen, Greg Smith and Chris Manolis needed to determine what, exactly, the American Dream is.
They found 35 dimensions that make up most views of the American Dream. They then created a “statistically valid” quantitative monthly survey to measure how people felt about the American Dream, from personal health to wealth, social status or trust in government.
The team broke those dimensions into five components — economic, well-being, societal, diversity and environmental — and created indexes measuring each. Combined, these comprise the American Dream Composite Index (ADCI).
What was the motivation for creating the ADCI?
Amit Sen: Our intention was to have a monthly index that ... track how people are doing in terms of their American Dream. We spent
almost three years trying to figure out all the different pieces of the American Dream — the things that people living in America value.
Greg Smith: We’re used to surveys that ask questions in isolation — how are people [doing] emotionally or financially. In this case, we’re asking additional things that could have to do with education ... or government.
How does the ADCI differ from the Consumer Price Index or the Consumer Sentiment Index?
Sen: We wanted the ADCI to be useful to businesses by measuring consumers’ true aspirations. We attempted to fill a gap in the marketplace by gauging the nation’s well-being by looking at all aspects of life ... To be clear, we don’t tell people this is what reality looks like. We present our data and say, “These are the kinds of things we are seeing.”
Why should retailers and brands care about a measure of the American Dream as an index?
Sen: The ADCI can give insight into whether consumers are environmentally conscious or interested in leisure activities, for example, or if they’re concerned about health and education. In turn, that gives insight into their preferences.
Smith: We know companies do a great deal of their own market research. [ADCI] provides a benchmark or confirmation of the work they’re doing. We’ve done this without any outside influence, so there’s no bias in the work. It’s a true academic endeavor that can be held to scientific rigor.
How can ADCI help retailers and brands determine marketing strategies?
Smith: Say you’re Starbucks considering a particular part of the country. With our data, we can actually give them insight into the actual profile of that region. It would help them in terms of knowing whether or not people living there have disposable income ... [or] the opportunity and ability for leisure.
By being able to look at specific regions of the country ... they can compare sales activity while comparing the general makeup of the population in these specific regions.
So ADCI helps rationalize real estate strategies?
Smith: We can look into a person’s “want” for social status. If you’re a company selling luxury or exclusive brands, you might find that people in a particular region of the country are quite satisfied, or not, with their social status already...
What we’re finding now is most people are able to cover their day-to-day expenses, but they aren’t satisfied with how well they’re saving.