The Outstater: ‘Lost’ LGBT Business

January 21, 2016

by Craig Ladwig

Imagine for a moment that you are not a baker of wedding cakes, a deliverer of pizzas, a lesbian, a gay, a bisexual or a transvestite. Imagine further that you don’t give a whit about restoring religious freedom or whatever, that your only concern is amorphous — just bringing more business to the state.

That should greatly simplify your position on the various pieces of LGBT legislation bouncing around the Statehouse this session. If Indiana doesn’t do something — anything — it’s going to lose business.

That was the rationale offered last year by the Lilly Foundation, the Chamber of Commerce and the Indianapolis Star, among many other prestigious voices. It convinced you to put the execution of your religious faith, such as it is, into the hands of people like Mike Pence, David Long and Brian Bosma. You thought you had no choice.

But wait. The Lilly Foundation, the Chamber of Commerce, the Indianapolis Star, et al., didn’t really know of which they spoke. They were working on what is called anecdotal evidence. Certain businesses, some convention managers, had merely told them that unless Indiana “got with the program” they were going to take their business elsewhere.

But did they? Would they?

There is a marketing concept known as “social desirability bias.” It describes the tendency of persons, even the smart heads of giant corporations and Pulitzer-minded editors, to answer questions in a manner that will be viewed favorably by others.

Obviously, this can interfere with interpretation of claimed intentions regarding the location or evacuation of manufacturing plants and corporate headquarters. Indeed, topics identified as especially vulnerable to social desirability bias include religion (often either avoided or uncomfortably approached), bigotry and intolerance (often denied, even if they exist).

A Japanese auto manufacturer, to pull an example from the 1970s, was shamed when it became known that it located plants away from demographically identified areas likely to suffer racial strife. No Chamber of Commerce survey picked that up.

So, in a business sense, we really don’t know what any of this last 12 months of LGBT hubbub and bad press have cost Indiana. It turns out that the early estimates were informed by little more than guesses.

That is the crux of a story this week out of the office of Visit Indiana, a quasi-official tourist group. A spokesman there says polling and market research have been unable to confirm its suspicion that because of the state’s Religious Freedom Restoration Act (RFRA) fewer conventions were booked in Indianapolis last year.

“Nobody really knows, because you don’t really know what you don’t get,” he told the Star (largely responsible for the initial hysteria). To complicate the question more, Indianapolis surpassed its 2015 goal for hotel bookings.

“Polls are increasingly unreliable, especially a poll about something as fuzzy as ‘perception,’ ” our friend Micah Clark wrote recently. Clark, director of the American Family Association of Indiana, goes on to explain that “there is no doubt that the hysteria and misinformation over RFRA may have given people not from here the wrong impression, and that was unfortunate and irresponsible on the part of many in the media and many with an agenda.”

He suggests that we focus instead on the $4.7 billion in new business investment in Indiana in 2015 reported by the Indiana Economic Development Corp.

All of which leaves you in a muddle. Who do you support, what should the legislature do? But you know at least one thing for certain — you and the rest of the world. That is, Indiana is a state in which decisions even as critical as those that affect individual and religious liberty are made in a small Statehouse room by a few powerful men on not much more than a bunch of wild guesses.

Now you would think that would be bad for business.

Craig Ladwig is editor of the quarterly Indiana Policy Review.


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