Optimism and Economic Choice

42 Pages Posted: 23 Jun 2005 Last revised: 30 Oct 2014

See all articles by Manju Puri

Manju Puri

Duke University - Fuqua School of Business; NBER; FDIC

David T. Robinson

Fuqua School of Business, Duke University; National Bureau of Economic Research (NBER); Duke Innovation & Entrepreneurship Initiative

Date Written: May 2005

Abstract

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.

Suggested Citation

Puri, Manju and Robinson, David T., Optimism and Economic Choice (May 2005). NBER Working Paper No. w11361. Available at SSRN: https://ssrn.com/abstract=727141

Manju Puri (Contact Author)

Duke University - Fuqua School of Business ( email )

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NBER

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FDIC ( email )

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Washington, DC 20429
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David T. Robinson

Fuqua School of Business, Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0120
United States
919-660-8023 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Duke Innovation & Entrepreneurship Initiative ( email )

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Durham, NC 27701
United States

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