Dispositional optimism (and pessimism), wealth, and stock market participation

Nils Grevenbrock

Journal of Economic Psychology, 2020, vol. 81, issue C

Abstract: In this paper I analyze the relationship between dispositional optimism (pessimism) and saving decisions. The key contribution of this paper is the use of direct psychometric measures of psychological dispositions as available in the Health and Retirement Study (HRS). The psychometric measures allow me to control for optimism and pessimism separately. Dispositional pessimism is shown to be significantly related to wealth holdings and stock market participation — optimism is not significantly related. A one standard deviation decrease in pessimism is associated with holding 64 thousand US-$ more overall wealth and an increase in the likelihood of holding stocks of 2.4%.

Keywords: Dispositional optimism; Household finance; Saving behavior (search for similar items in EconPapers)
JEL-codes: D14 G11 G41 G51 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:81:y:2020:i:c:s016748702030088x

DOI: 10.1016/j.joep.2020.102328

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