(p. B1) Far from deforming our view of the future, this penchant for life’s silver lining shapes our decisions about family, health, work and finances in surprisingly prudent ways, concluded economists at Duke University in a new study published in the Journal of Financial Economics. “Economists have focused on optimism as a miscalibration, as a distorted view of the future,” said Duke finance scholar David T. Robinson. “A little bit of optimism is associated with a lot of positive economic choices.”
. . .
Optimists, the Duke finance scholars discovered, worked longer hours every week, expected to retire later in life, were less likely to smoke and, when they divorced, were more likely to remarry. They also saved more, had more of their wealth in liquid assets, invested more in individual stocks and paid credit-card bills more promptly.
Yet those who saw the future too brightly — people who in the survey overestimated their own likely lifespan by 20 years or more — behaved in just the opposite way, the researchers discovered.
Rather than save, they squandered. They postponed bill-paying. Instead of taking the long view, they barely looked past tomorrow. Statistically, they were more likely to be day traders. “Optimism is a little like red wine,” said Duke finance professor and study co-author Manju Puri. “In moderation, it is good for you; but no one would suggest you drink two bottles a day.”
For the full story, see:
Robert Lee Hotz. “Science Journal; Except in One Career, Our Brains Seem Built for Optimism.” Wall Street Journal (Fri., Nov. 9, 2007): B1.
(Note: ellipsis added.)