California Economic Survey: March 2025

The ��˴�Ƭ Institute for Economic Policy Research (SIEPR) tabulated results from its second quarterly California Economic Survey. The survey polled 1,735 California residents about the overall economy and asked specific questions about recent wildfires and tariffs.

Californians, like the nation at large, are expressing more negative consumer sentiment.
- Consumer sentiment scores in California dropped 11.7 points (15%) from 80.3 in December 2024 to 68.6 in March 2025. The national University of Michigan preliminary March consumer sentiment score dropped 16.1 points over the same time period.
- Sentiment in Los Angeles County was 8.6 points higher than the rest of CA and suffered less of a quarterly decline, suggesting the recent wildfires were not driving the declining sentiment.
- Most Californians expect tariffs will hurt the average American, themselves, and their employer, at 73.6%, 69.3%, and 57.6%, respectively.
Californians are putting an increased emphasis on environmental issues, but remain mainly concerned on issues salient in the state.
- Inflation and housing costs remain the top issues for Californians, with 20.6% and 17.7%, respectively, citing them as the most pressing issues.
- Concerns regarding climate change and the environment saw a sharp increase to the third most pressing issue now at 12.3%.
- Californians became slightly less concerned with homelessness, which decreased to 11.2%.
In the wake of January’s southern California wildfires, state residents in our sample blame insurance companies more than government for insurance problems but stand largely divided on fixes.
- Californians are greatly or somewhat concerned about the price (75.7%) and the availability (60.2%) of insurance.
- When asked to assign responsibility for problems with home insurance, Californians primarily blame insurance companies (66.2%), followed by government officials and state regulations (50.9% and 46.0%), and climate change (30.3%), suggesting most of the perceived issue stems from market conditions rather than recurring natural disasters.
- To fix problems with home insurance, respondents are roughly divided on increasing (34.6%) versus decreasing regulations (20.1%).
- Over half of respondents (56%) support insurance subsidies for homeowners who live in fire-prone areas, but of those that support subsidies. 41% would not be willing to pay more to cover said subsidies.

The survey was conducted over March 11-19, 2025, by the polling firm YouGov. The questions were designed to mirror those asked in national surveys, allowing us to compare the responses of Californians to the country as a whole in an apples-to-apples manner. Results from the December 2024 survey can be found here.

A. State sentiment drops, mirroring national concerns.

Californians reported a significant decrease in consumer sentiment from last quarter, in line with the decline seen at the national level. From 80.3 points in December 2024 to 68.6 in March 2025, consumer sentiment scores in California dropped 11.7 points in one quarter (Figure 1).

Figure 1: Quarterly Point Changes in Consumer Sentiment (Q1 2025 - Q4 2024)

The overall drop in sentiment reflects worsening perceptions, often referred to as soft data, regarding the overall economy. According to the University of Michigan Survey of Consumers, national sentiment in March dropped to 57.9, a 16.1 point decline from last quarter.

Tariffs are also weighing on Californian’s economic outlook. Most Californians expect tariffs will hurt the average American, themselves, and their employer, at 73.6%, 69.3%, and 57.6%, respectively (Figure 2). Californians in our sample are more pessimistic than Americans at large, with 85% anticipating an increase in store prices, compared to 69% of .

Figure 2: Californians' Predicted Impact of Tariffs on the Average American, Themselves, or Their Employer

B. Top issues remain homelessness and inflation, with increased concern about job availability in the state.

Respondents were asked to select the most important issue in the state, slightly reshuffling their priorities from last quarter. Inflation and housing costs remain the top answers, despite slight dips from last quarter, with 20.6% and 17.7% of respondents, respectively. A notable increase was placed on climate change and the environment, now as the third top issue (12.3% of respondents). Concerns regarding homelessness saw the largest dip at 3.8 points, as shown on Figure 3.

Figure 3: Quarterly Change in Respondents' Most Important Issue, Select Responses

C. Californians express worries regarding home insurance, blaming the federal government, utilities, and insurance companies—mixed on solutions.

Californians have significant concerns about both the price and availability of insurance, with homeowners and residents of Los Angeles County expressing the most pronounced worry. Results show that 75.7% of Californians are greatly or somewhat concerned about the price of insurance, and 60.2% are greatly or somewhat concerned about the availability of insurance. More Angelenos are worried, with a 4.1 point greater concern, about availability. Those that directly pay for home insurance are more concerned with these issues: compared to renters, homeowners are 23.6 points more concerned with insurance availability, and 15.7 points more concerned with price (Figure 4).

Figure 4: Concern Surrounding Price and Availability of Home Insurance, by Homeownership

Californians in this sample mostly hold insurance companies and government officials responsible for high prices and lack of availability of home and property insurance in addition to a lack of action in reducing wildfire risk. Those surveyed blame insurance companies (66.2%), the government (50.9%), and regulations (45.9%) more than climate change (30.3%), suggesting most of the perceived issue stems from market conditions rather than natural disasters (Figure 5). Californians see the Federal government (70.3%), insurance companies (67.3%), utilities (65%), then the state government (57.9%) as doing too little to reduce the effects of wildfire risk (Figure 6). Compared to their national counterparts, Californians have a higher degree of confidence in themselves and their neighborhoods in reducing the risks of wildfires. Specifically, 20.3 percentage points more believe their neighborhood is not doing enough, and 17.9 percentage points more think they themselves are not doing enough to mitigate wildfire risk.

Figure 5: Responsibility for Home and Property Insurance Problems

Figure 6: Efforts to Reduce Wildfire Risk

Californians have mixed opinions on potential solutions for insurance problems. To fix the issues, respondents are divided on increasing regulations for insurance companies, with 34.6% supporting more regulations, and 20.1% supporting less regulation (Figure 7). Compared to renters, homeowners are 5.8 points more likely to support increased regulations.

Figure 7: Regulations on insurance companies

While most (55.7%) of those surveyed support insurance subsidies for homeowners who live in fire prone areas, of those who support increased subsidies, 41% would not be willing to pay more to cover said subsidies (Figure 8). Likely stemming from recent wildfires, Los Angeles residents are 9.5 points more likely to support subsidies than Californians at large.

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