A behavioral economist at the University of Bath in the U.K. has found evidence linking higher levels of unwarranted financial optimism with lower levels of cognitive ability. In his study, published in the journal Personality and Social Psychology Bulletin, Chris Dawson surveyed thousands of people in the U.K. about their economic outlook and compared their responses with their true financial outlook.
Prior research has found links between a sunny outlook and better health and also a higher overall quality of life, including better relationships with people. But it has also shown that being overly optimistic can lead people to make poor decisions, such as how much to save for retirement. In this new study, Dawson looked for an association between unrealistic optimism and cognitive ability regarding financial decision-making.
Suspecting that people with lower cognitive abilities tended to overestimate their financial acumen, and thus make poor financial decisions, Dawson accessed the data repository of the Understanding Society project, which conducted a longitudinal survey involving more than 40,000 households in the U.K. and Northern Ireland over the years 2009 to 2021. He also analyzed data from the British Household Panel Survey run from 1991 to 2008.
The surveys queried respondents about their financial situation along with their expectations for the future. And because respondents were queried more than once over the course of the survey, Dawson was able to compare their earlier expectations with how things had actually panned out years later. Also included in the surveys were questions designed to assess several traits associated with cognitive ability, such as memory, word recall, verbal fluency, math ability and abstract thought.
By comparing the results from both parts of the surveys, Dawson was able to compare cognitive ability with financial optimism. In so doing, he found associations between the degree of optimism reported and cognitive ability. Those with higher cognitive abilities tended to be less optimistic, while the opposite was true for those who had lower cognitive abilities.
More specifically, he found that respondents scoring the highest on the cognitive tests were 22% more likely to fall into the category of realists, which Dawson describes as more objective about their financial prospects, than were those falling on the opposite end of the spectrum.
Chris Dawson, Looking on the (B)right Side of Life: Cognitive Ability and Miscalibrated Financial Expectations, Personality and Social Psychology Bulletin (2023). DOI: 10.1177/01461672231209400
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Higher levels of financial optimism associated with lower levels of cognitive ability (2023, November 23)
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Mtaalamu wa uchumi wa tabia katika Chuo Kikuu cha Bath, Uingereza, amepata ushahidi unaounganisha viwango vya juu vya matumaini ya kifedha yasiyo na msingi na viwango vya chini vya uwezo wa utambuzi. Katika utafiti wake uliochapishwa katika jarida la Personality and Social Psychology Bulletin, Chris Dawson aliwauliza maelfu ya watu nchini Uingereza kuhusu mtazamo wao wa kiuchumi na kulinganisha majibu yao na mtazamo wao wa kweli wa kifedha. Utafiti wa awali umegundua uhusiano kati ya mtazamo wa jua na afya bora na pia ubora wa maisha wa jumla, pamoja na mahusiano bora na watu. Lakini pia imeonyesha kwamba kuwa na matumaini kupita kiasi kunaweza kuwafanya watu wafanye maamuzi mabaya, kama vile kiasi cha kuhifadhi kwa ajili ya kustaafu. Katika utafiti huu mpya, Dawson alitafuta uhusiano kati ya matumaini yasiyo ya kweli na uwezo wa utambuzi kuhusu kufanya maamuzi ya kifedha. "Kwa kuwa watu wenye uwezo mdogo wa kutambua mambo ya kifedha huwa na uwezo wa kukadiria mambo ya kifedha, Dawson aliangalia data ya ""Understanding Society"" ambayo ilichunguza zaidi ya nyumba 40,000 nchini Uingereza na Ireland ya Kaskazini kati ya mwaka 2009 na 2021."" Pia, alitoa ripoti ya utafiti wa British Household Panel Survey uliofanywa mwaka 1991 hadi 2008. Uchunguzi huo uliwauliza washiriki kuhusu hali yao ya kifedha pamoja na matarajio yao ya wakati ujao. Kwa sababu washiriki waliulizwa maswali zaidi ya mara moja katika kipindi cha utafiti, Dawson aliweza kulinganisha matarajio yao ya awali na jinsi mambo yalivyokuwa miaka kadhaa baadaye. Pia, maswali yalijumuishwa katika uchunguzi huo ili kutathmini sifa kadhaa zinazohusiana na uwezo wa utambuzi, kama vile kumbukumbu, kukumbuka maneno, ufasaha wa maneno, uwezo wa hisabati na mawazo ya abstract. Kwa kulinganisha matokeo kutoka sehemu zote mbili za uchunguzi, Dawson aliweza kulinganisha uwezo wa utambuzi na matumaini ya kifedha. Kwa kufanya hivyo, alipata uhusiano kati ya kiwango cha matumaini yaliyoripotiwa na uwezo wa utambuzi. Wale wenye uwezo wa kukumbuka zaidi walikuwa na mwelekeo wa kuwa na matumaini kidogo, huku wale wenye uwezo wa kukumbuka chini wakiwa na mwelekeo kinyume. "Kwenye utafiti huo, waliojibu maswali ya ""kijarida"" walikuwa na uwezekano wa 22% zaidi wa kuanguka katika jamii ya watu wa kweli, ambao Dawson anaelezea kama ""wawakilishi zaidi juu ya matarajio yao ya kifedha"" kuliko wale walio katika mwisho kinyume cha wigo." Chris Dawson, kuangalia upande wa (B) haki ya maisha: Uwezo wa utambuzi na matarajio ya kifedha yasiyofaa, utu na saikolojia ya kijamii Bulletin (2023). "Kutoka kwa ""Makubaliano ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa ya Kimataifa.""" Isipokuwa kwa ajili ya utafiti wa kibinafsi au utafiti, hakuna sehemu yoyote inaweza kuzalishwa bila ruhusa ya maandishi. Yaliyomo hutolewa kwa madhumuni ya habari tu.