Most People Are "Serial Optimists," Even If Their Situation Says Otherwise

TPOH

Where do you see yourself in five years? Better off? Worse off? Odds are that you see your future as being brighter than the past, according to a study published in the National Bureau of Economic Research.

Nobel laureate economist Angus Deaton published a paper titled "What do Self-Reports of Wellbeing Say about Life-Cycle Theory and Policy?" in the NBER, and in that paper he discusses how our outlook on the future tends to be positive. In the abstract, he writes:

I respond to Atkinson's plea to revive welfare economics, and to considering alternative ethical frameworks when making policy recommendations. I examine a measure of self-reported evaluative wellbeing, the Cantril Ladder, and use data from Gallup to examine wellbeing over the life-cycle. I assess the validity of the measure, and show that it is hard to reconcile with familiar theories of intertemporal choice. I find a worldwide optimism about the future; in spite of repeated evidence to the contrary, people consistently but irrationally predict they will be better off five years from now. The gap between future and current wellbeing diminishes with age, and in rich countries, is negative among the elderly. I also use the measure to think about income transfers by age and sex. Policies that give priority those with low incomes favor the young and the old, while utilitarian policies favor the middle aged, and men over women.

All the jargon aside, Deaton's findings show that we as human beings are "serial optimists." Even though there are often difficult times both ahead and behind us, it seems like the human spirit is stubbornly positive about what is coming down the pike.

Have you experienced this? Are you one of those perpetual optimists?

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