Optimism - Economics & Psychology: Two Sides of the Same Coin?

This paper investigates a possible correlation between the economic concept of optimism as measured by the parameters of the probability weighting function and the psychological concept of optimism as measured with the revised version of the Life-Orientation Test. 39 students of the Erasmus University Rotterdam were individually interviewed to measure these two types of optimism. Even though the existing literature points towards a possible correlation between economic and psychological optimism, no such correlation is found in this study. However, optimism is a broad term containing several different types of optimism. It is therefore possible that the difference between what literature suggests and the findings of this paper can be explained by the fact that they refer to different types of optimism.