Updated on 09.18.14

The “Lake Wobegon” Effect

Trent Hamm

Where the women are strong, the men are good looking, and all the children are above average.
– Garrison Keillor, A Prairie Home Companion

Sure, that line is used for laughs on NPR on Saturday afternoons to describe the placid, fictional Lake Wobegon, but the humor points to a rather serious matter: people constantly overrate their own achievements and capabilities in relation to others.

Here’s a simple example. Let’s say I took you and ninety-nine other random readers of The Simple Dollar and gave you all a battery of tests to rate your intelligence. Where would you predict that you would rank in the end? Would you be in the top half? Would you be in the top ten?

If I were guessing, I would probably put myself somewhere in the middle of the pack. I think I’m fast at putting simple ideas together into a somewhat more interesting larger grouping (I’m good at Jeopardy!, in other words), but I’m not particularly brilliant or anything. I find myself consistently falling short of where I hope I would be in lots of areas.

If you gave me the same question ten years ago – or even five years ago – I know quite well that I would have ranked myself very high with such a question. My set of experiences, to that point, had vastly overrated my small gift of relative speed and convinced me that I had special abilities. Constant positive reinforcement of those abilities didn’t help – seeing people surprised at my speed of limited recall and limited association and having them tell me how impressive it was further inflated my perception of myself.

The same is true for most people and most features. Almost all of us have abilities or features that we consider above average – quite often, we consider the sum of these abilities and features to be above average. And why not? The world around us has shown it to be true – people give us positive feedback all the time, so we must be good, right?

The “Lake Wobegon Effect”: Factors to Consider

1. People generally prefer positive interaction

Most people prescribe to the notion that if you have nothing positive to say, don’t say anything at all. They’ll look at an individual, identify whatever traits they can that they deem to at least not be a huge negative, and complement the person on those traits.

A person with average looks – perhaps a below-average figure but above-average eyes – may have heard many complements on their eyes and thus believe that their overall looks are above average – after all, people are complementing you, right?

2. It’s a good survival strategy to believe we can handle anything

Without an underlying sense of success, people would be afraid to try anything new. New technologies wouldn’t be proposed or even introduced. New ideas wouldn’t be shared. In short, confidence is useful.

3. We often overextend our healthy level of confidence to an unsafe point

This happens in two directions – we’re overconfident in some areas where some degree of confidence is appropriate (our own skills, for example) and confident (often quietly so) in areas we have no control over whatsoever (like our continuing health).

Each of these directions has a different set of tools to help you succeed.

Solutions to the “Lake Wobegon” Effect

For overconfidence, try placing your skills in competition with others

The more direct this competition is, the better. Many people avoid competition because they fear losing or looking bad. I argue that losing is actually more valuable than winning. It teaches you that you’re not the best and shows you what you need to work on.

For example, I often use my subscriber count as a way to compare myself to other bloggers. It’s easy to see that I’m left in the dust by many other blogs – Daily Kos and TechCrunch, for example, have orders of magnitude more subscribers than I do. This is proof positive that I’m not the best writer out there. I respond not by thinking “I’m a failure,” but by thinking “I know I can do better than that” and seek ways to reach out even more.

For misplaced confidence, visualize some worst-case scenarios

What happens to you if you’re hit by a truck tomorrow morning? What happens to you if you get a serious disease? What happens if those things happen to your spouse? Your child? What if your company goes under tomorrow morning and you walk in facing a pink slip?

Those scenarios often point you in the right direction for finding appropriate ways to actually back up your personal confidence. Start an emergency fund. Create a master information document. Get a good term life insurance policy. Build good relationships with people in your career field – and in your neighborhood.

In other words, back up that confidence with something real. The better the structure behind you, the more likely it is that you really are living in your own Lake Wobegon, where things really are above average, safe, and secure.

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  1. On additional point…

    A coworker reminded me that studies have found people that lack a specific skill also lack the ability to determine whether they have that skill.

    Example: bad drivers not only lack the skill to drive, they lack the ability to determine if they are good drivers!

  2. maybelle says:

    Well, SOMEONE has to be the best!

    Of course, the flip side of that is exactly your point! right on.

  3. Candi says:

    Now if only reading your article would make people any more self aware!

    Of course they think they’re smarter than they really are, everyone thinks road rage is caused by “other” drivers, right?! Everyone else is rude, everyone elses children act up in public.

    I sincerely hope that folks can listen to your advice and be able to see how it might apply to themselves, but I wouldn’t bet on it.

  4. Michael says:

    It’s no Lake Wobegon effect to say that I’m good-looking. :D

  5. GeorgiaS says:

    “Complement” as it’s used throughout should read “compliment.” To complement is to go well with, to enhance. Yup, being a grammar know-it-all–that’s one area where I have confidence!

  6. Sharon says:

    You shouldn’t underestimate yourself; strive for the best – not average.

  7. Matt @ Ratoinal Imperative says:

    That’s an interesting way to see healthy confidence. Is it ever too disheartening to look at the gap between you and a much more premiere blog and have the urge to give up?

    Also, I would argue that subscriber count certainly doesn’t always mean better writing.

  8. Kathryn says:

    A small percentage tend to think the other way: if someone is complimenting me they must want something, don’t they? I’m the bottom of the curve . . . i think of the worst case scenario TOO often . . . i’ve not much confidence in anything i do.

    I know those of us who think this way are the smaller percentage, especially as i run into so many people who feel they are more important than the rest.

  9. Michael says:

    Kathryn, learn to see your pessimism as pride in your own opinion if not your abilities.

  10. Mang says:

    Nice post. A newer study by Kruger (1999) had participants rate their own ability compared to others on a list of skills. Half of these skills were difficult (e.g. computer programming) and the other half were easy (e.g. using a computer mouse). Participants were also asked to rate the difficulty of these skills. There was an above-average effect for easy tasks and a below-average effect for difficult tasks. People thought that were above average on easy tasks, but thought that they were below average on difficult tasks. It varies between people, for example, saving money could be easy for some and difficult for others.

  11. a conscience life says:

    Since this is a financial blog, I will make the comment that exactly the opposite seems to be true of people when they rate their economic place is society. I say this based on the low savings rate in this country (The US). It seems that people think they must spend more money on things and experiences because ‘everyone else does.’ This is, of course, the well-known problem of “keeping up with the Jones’s”, but it struck me that perhaps one reason for this feeling is that one might think that they are not ‘experiencing life’ (read: buying stuff) to the same extent as those people they perceive as being in the same socio-economic class. Just a thought I had.

  12. Beverly D says:

    When I first started learning about statistics, one of the first examples was that over 50% of drivers think they are better than average. This is obviously not possible.

    Subscriber count may have relevance to how successful the blog becomes, but it is not a factor in how well you write. Many other factors are involved in the blog: interest in the subject, style of the blogger, overall feeling of credibility, and others.

    I love this blog and follow you daily. Keep up the great work, even if you do occasionally use an incorrect form here and there.

  13. a conscience life says:


    I sure hope that I don’t come off as overly pedantic (which means I will), BUT I feel that this is worth correcting, since statistics is so often misunderstood but so often encountered in day-to-day life. Please take this in the spirit of trying to help (rather than jumping down your throat).

    You said “50% of drivers think they are better than average. This is obviously not possible”

    Actually, it is quite possible. Consider the following example. Take 100 drivers, each that drive for one year. 99 drivers get in zero accidents in that year and 1 driver gets in 100 accidents in that year. Over the course of that year the “average” driver got in 1 accident. Thus, there are 99 drivers (99%) That are above “average.”

    This just serves to highlight the difficulties in quoting and interpreting statistics. There is a lot of “common sense” that gets in the way of correctly gaining information from the statistics that one is presented with on a daily basis. Granted, the example that I used was an extreme case, but I think the point is quite valid. This is why it is always nice to see other statistical information (ie. standard deviation, median, etc) along with the average (mean).

  14. shadox says:

    I am always wondering about my own abilities and I have found that the best way to measure them is to find an objective metric(as you suggest with subscriber count for example). GMAT / SAT scores, annual income, blood pressure, whatever metric you can use that is difficult to fudge is a good and objective place to start. Of course, those metrics only apply to the specific area they are meant to measure…

    In my case, if you take the subscriber count for your blog as a measure, after 2+ years of running my blog, all my illusions of superiority have justifiably disappeared… :-)

  15. Foxie says:

    I sure hope nobody with self-esteem issues were to read this. I’m still working through a LOT of the self-esteem/selfish dynamic myself… And, sorry, I don’t see putting myself first as “selfish.” (In fact, it benefits my husband so much more when I take care of me first. He’s quite capable of taking care of himself I’ve found.)

    It’s thin ice at best, I guess. Having self-esteem and confidence vs. being narcissistic and cocky. Take it all with a pinch of salt and a healthy dose of modesty and society would be much better.

    That and I do consider myself a better driver than average… I have the courtesy to everyone else to NOT talk on my phone, eat, put on makeup, etc while I’m driving with YOU. I drive and only drive, maybe have music playing but never very loud…. Is it really too much to ask for people to pay attention when driving?! (Just throwing it out there…. I know I rub a lot of people the wrong way. I blame my age. There goes the confidence. Or cockiness. Suppose it depends on point of view.)

  16. Irulan says:

    @shadox: The problem with your method is that you are comparing yourself to a group that may or may not be representative of the general population. For instance, your SAT score is relative to all college-bound high school seniors from the year that you took the exam.
    This is probably not the best place to get into the issues of test bias, norming, and the tenuous relationship between aptitude tests and intelligence, though, so I’ll step off of my soap box. =)

  17. Lenore says:

    Here’s to Georgia who said, “Yup, being a grammar know-it-all–that’s one area where I have confidence!” She just committed a run-on sentence with a misplaced hyphen. Aside from the narcissistic glee I got from being able to make that petty observation, I found this post a little depressing. It did remind me of a realization I came to long ago though.

    Having struggled through an awkward childhood plagued with ridicule, I came to a startling realization at about age 16. I was suddenly above average in everything I considered important. I had lost weight and could perform most physical endeavors with undreamt of endurance and grace. My acne had cleared up, and I had finally come to believe it when people said I was pretty. My ACT scores were in the 97th percentile, and my GPA was among the top 15 percent at my school. Best of all, I had overcome crippling shyness and learned to get along with just about anyone.

    Then somewhere in my 30s, I realized I had lost many of these advantages. I was seriously overweight and out of shape. My skin had lost that youthful radiance and was starting to wrinkle and sag. Because of mental illness, my intelligence and competency were slipping. The medication I took for bipolar disorder made me extremely uncomfortable in groups, and I felt incapable of controlling myself in social settings.

    At some point, I had to take stock of myself and realize it didn’t matter that I was no longer above average. We come into this world unable to do much of anything, and we will all return to that state if we live long enough. I have to enjoy what I am capable of doing now and improve what I can. Even if I end up being below average or absolutely terrible at most things, I have to love myself for who I am, who I was and who I might yet be. Comparing myself with others will get me nowhere unless I acknowledge that I don’t have to keep up with anyone or anything in order to be happy.

  18. Jimmy says:

    Trent says “confident (often quietly so) in areas we have no control over whatsoever (like our continuing health).”

    I partially disagree with this statement. For the majority of the population we very much have control over our health. Vigorous exercise and a healthy diet can do wonders for the body as we get older. Or any age for that matter.

    Could you explain what you mean by this or am I reading it wrong?

  19. bell N says:

    I think there are other factors at work in the “Lake Wobegon” effect.
    Human minds seem wired to seek out those facts that confirm what they already believe, and to reject what they don’t believe. If I believe that the moon is blue, I will find people and websites and books that agree with me, and subtly discredit those that don’t.

  20. mike says:

    Obviously didn’t grow up irish or city growed.

  21. meredith says:

    Trent, I enjoy your blog and read it nearly every day, but I would encourage you to get a better grasp of basic grammar and syntax.

    There are lots of good guides: “Lapsing into a Comma,” by Bill Walsh; “Eats, Shoots & Leaves,” by Lynne Truss; as well as the good old “Elements of Style” by Strunk and White.

    Thank you for all of your insightful posts. I have learned a lot from The Simple Dollar.

  22. GeorgiaS says:

    Lenore, yeah, I felt foolish when I realized my mistake. In my defense, for some reason, using a double hyphen (which is what I typed between “all” and “that’s”) comes out not as a dash (as it would in Word, for instance), but a single hyphen. Guess I’ll have to use a colon next time.

  23. MLR says:

    I often (sometimes to my dismay) place my skills in competition with others.

    At times, it is disheartening. At other times, it is exciting.

    I would say that is a good idea to ground yourself. But if you are already pessimistic, don’t worry about others!

  24. Jill says:

    there’s also an article about the “Lake Wobegon” effect in June’s Report on Business magazine

  25. Katy says:

    Great points! Of course, the people who really need to hear this are the ones who think there’s nothing wrong with their over-inflated egos and thus wouldn’t bother reading a blog like this anyhow. (Why would they, when they have all the answers already?)

    But it’s good to know that I’m surrounded by many others here who are also searching for ways to make our lives better while making OURSELVES better. I appreciate that you’re sharing with us ways to improve our lives financially and also taking the time to help us grow personally through introspection.

    Keep up the good work!

  26. Dave Clark says:

    Don’t feel bad about being left behind by the daily kos – you get enough liberal whiners together posting repeatedly, the stats are always going to be high. Keep up the great work and thanks for your insight and thoughts!

  27. Meg says:

    I have read that people who tend to be depressed actually have a much more realistic view of themselves and their abilities when given these testsm, in comparison with those who do not have depression.

    On a related note, one of my favorite movie lines is in Spanglish when the grandmother says “Lately, your low self-esteem is just good common sense!”

  28. tentaculistic says:

    Hi Trent, please take this in the very kind spirit of helpfulness in which it is extended. “compliment” = saying something nice (I have to compliment your outfit today, it’s so nice!), “complement” = 2 or more things going together well (the blue shirt complements her eyes; the flavor of the chardonnay complements the chicken dish).

    Not pedantic (ok fine I am the most hideously anal-retentive editor you’ve ever met! That’s why I get the big bucks :) but you are working so hard and so well toward being an excellent writer, and we’re your first line of feedback.

  29. Mary says:

    Please don’t put yourself in a league with the Kos crowd. You are better and actually helpful!

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