41 Pages Posted: 1 Aug 2005
Date Written: May 2005
This paper presents some of the first large-scale survey evidence linking optimism to major economic choices. We create a novel measure of optimism using the Survey of Consumer Finance by comparing a person's self-reported life expectancy to that implied by statistical tables. Optimists are more likely to believe that future economic conditions will improve. Self-employed respondents are more optimistic than regular wage earners. In general, more optimistic people work harder and anticipate longer age-adjusted work careers. They are more likely to remarry, conditional on divorce. In addition, they tilt their investment portfolios more toward individual stocks.
JEL Classification: D1, G1, M54
Suggested Citation: Suggested Citation
Puri, Manju and Robinson, David T., Optimism and Economic Choice (May 2005). AFA 2006 Boston Meetings Paper. Available at SSRN: https://ssrn.com/abstract=686240 or http://dx.doi.org/10.2139/ssrn.686240