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The elephant in the room in this study is how the UK economy has performed over the study period. From a quick read, they are essentially asking people to pred
by wbillingsley 3y ago
The elephant in the room in this study is how the UK economy has performed over the study period.
From a quick read, they are essentially asking people to predict whether they'll be better/worse off next year, and then correlating that with whether they were right in the next year's financial data.
Their study period looks like it's the period immediately post-GFC (2009 to 2021). As I understand it, the economy has performed better for those in professional roles, who are likely to score well on the tests of cognitive ability, than it has for lower-skilled jobs. And of course in the middle of that period, there's the Brexit vote that was pretty uneven in terms of who thought the economy (and their circumstances) would go well or badly.
It's an interesting data set, but I don't think I'd be game to make the same "causative" conclusions that they do ("Our findings suggest that these supposed consequences of optimism bias, may be a side product of the true driver, low cognitive ability").
- rTX5CMRXIfFG 3y agoNot sure why the study period matters as long as their sample is representative of the population, which it seems to be?
- fabatka 3y agoBecause the results also depend on the economy. Different times might provide more wealth to people in different strata.
- bspammer 3y agoIt matters because if specific hard-to-predict one-off events hadn’t happened (e.g the Brexit vote), the optimists might have come out looking much better.
- mewpmewp2 3y agoThere could be a time period in which cognitively well performing people are rewarded much better than in the past, so all the predictions of highly cognitive people will seem pessimistic on average, compared to others. So for example, let's say tech starts to boom, and everyone good with tech will all of sudden have much better financial performance, although everyone were making their predictions based on historical performance.
- varjag 3y agoTo me the Rand quote in the paper alone makes it hard to take it seriously.
- taneq 3y agoAlso I'd expect a pretty good correlation between IQ score and the ability to look at the general state of the economy (both UK and global) and think "well that's not good."