An article co-authored by Associate Professor of Economics Stephen Wu was published in the October issue of The Journal of Socio-Economics. “Fatalism and Savings,” written with Joel Shapiro of the University of Oxford, examines the impact of fatalism – the belief that one has little or no control over future events – on the decision of whether or not to save.
The authors developed a model linking fatalism to savings, predicting that fatalism decreases savings for moderately risk averse individuals and increases savings for highly risk averse individuals, but otherwise has no impact. They also proposed that fatalism decreases one's effort to learn about savings and investment options. Using data from the National Longitudinal Survey of Youth (NLSY), Wu and Shapiro found general support for the theoretical predictions of their model.