Volatility Overload - How Market Volatility Affects Self-Reported Life Satisfaction.

We investigate how economic uncertainty, specifically stock market uncertainty, correlates to individuals' life satisfaction. Using expected price volatility (VIX) as our anticipatory indicator and life satisfaction as our measure of utility, our hypothesis is built on the Anticipatory Utility framework, which suggests that people also derive utility from their beliefs. After accounting for associations with the unemployment rate and stock ownership, we find a positive relationship between the VIX and low self-reported life satisfaction. This analysis captures the contemporaneous effects of future beliefs and indicate that economic sentiment about the future plays an important role in individuals' feelings about the present. [ABSTRACT FROM AUTHOR]