Socioeconomic Status and Macroeconomic Expectations / Sreyoshi Das, Camelia M. Kuhnen, Stefan Nagel.

Format:

Book

Author/Creator:

Das, Sreyoshi.

Contributor:

National Bureau of Economic Research.

Kuhnen, Camelia M.

Nagel, Stefan.

Series:

Working Paper Series (National Bureau of Economic Research) no. w24045.

NBER working paper series no. w24045

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2017.

Summary:

We show that individuals' macroeconomic expectations are influenced by their socioeconomic status (SES). People with higher income or higher education are more optimistic about future macroeconomic developments, including business conditions, the national unemployment rate, and stock market returns. The spread in beliefs between high- and low-SES individuals diminishes significantly during recessions. A comparison with professional forecasters and historical data reveals that the beliefs wedge reflects excessive pessimism on the part of low-SES individuals. SES-driven expectations help explain why higher-SES individuals are more inclined to invest in the stock market and more likely to consider purchasing homes, durable goods, or cars.

Notes:

Print version record

November 2017.