Optimism and economic choice

Journal Article (Journal Article)

We create a novel measure of optimism using the Survey of Consumer Finance by comparing self-reported life expectancy to that implied by statistical tables. This measure of optimism correlates with positive beliefs about future economic conditions and with psychometric tests of optimism. Optimism is related to numerous work/life choices: more optimistic people work harder, expect to retire later, are more likely to remarry, invest more in individual stocks, and save more. Interestingly, however, moderate optimists display reasonable financial behavior, whereas extreme optimists display financial habits and behavior that are generally not considered prudent. © 2007 Elsevier B.V. All rights reserved.

Full Text

Duke Authors

Cited Authors

  • Puri, M; Robinson, DT

Published Date

  • October 1, 2007

Published In

Volume / Issue

  • 86 / 1

Start / End Page

  • 71 - 99

International Standard Serial Number (ISSN)

  • 0304-405X

Digital Object Identifier (DOI)

  • 10.1016/j.jfineco.2006.09.003

Citation Source

  • Scopus