Abstract
At the onset of the COVID-19 outbreak we conducted two surveys in the United Kingdom and Sweden (N=2021) regarding how people assess the near future economic situation within their household, nation, and the world. Together with psychological factors related to information processing we link these prospects to financial well-being. We find that, although generally very pessimistic, a substantial proportion of individuals believes that their households’ economy will be doing substantially better than the national and global economy, suggesting a “financial better-than-average” effect. Furthermore, we find that the pessimism regarding future household economic situation and being financially ignorant are associated with decreased financial well-being, while the (inter)national economic situation is not. This study shows how contextual factors and personal aspects shape financial well-being during turbulent and stressful times.
Highlights
The spread of the COVID-19 is a global emergency for people’s lives and health
International Monetary Fund (2020) has projected in its World Economic Outlook report published in June 2020 that due to COVID-19 pandemic the global economy will contract sharply by
The contribution of this study is twofold; First, we investigate what are the expectations of the future economic outlook of private, national, and global economic situation at the onset of the economic downturn caused by COVID-19 pandemic in the United Kingdom and Sweden
Summary
The spread of the COVID-19 is a global emergency for people’s lives and health. At the same time, the outbreak is having major effects on the economy both for households and nations. International Monetary Fund (2020) has projected in its World Economic Outlook report published in June 2020 that due to COVID-19 pandemic the global economy will contract sharply by−4.9 percent in 2020. The outbreak is having major effects on the economy both for households and nations. International Monetary Fund (2020) has projected in its World Economic Outlook report published in June 2020 that due to COVID-19 pandemic the global economy will contract sharply by. At the onset of COVID-19 outbreak we surveyed people in two European countries regarding how they assess the future economic situation within their household, nation, and the world as a whole. We collected individual difference measures on psychological factors related to information processing, financial literacy, and emotional aspects of financial well-being. This allows us to explore which factors contribute to better financial well-being during a sudden financial crisis
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