Diminished Expectations of Nuclear War and Increased Personal Savings: Evidence From Individual Survey Data

Bruce Russett, Joel Slemrod

NBER Working Paper No. 4031
Issued in March 1992
NBER Program(s):Economic Fluctuations and Growth, Public Economics

At the end of 1983 Gallup polls showed that 52 percent of Americans thought that the probability of a world war in the next 10 years was 50% or higher; by 1989 the percentage had dropped to 29%. Fear of war of this pervasiveness is bound to have an effect on decisions about present versus uncertain future consumption. This paper investigates the cross-sectional relationship between saving and fear of war using responses to telephone surveys conducted during April and October of 1990. The analysis shows that an individual's professed level of fear about the likelihood of nuclear war was significantly negatively related to the probability of being a saver rather than a dissaver, to changes in actual saving, and to saving plans relative to actual savings. Fear of war had an independent effect controlling for many demographic, economic and psychological characteristics. These results are broadly consistent with other evidence on the relationship between aggregate saving and fear of war over time and across countries.

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Document Object Identifier (DOI): 10.3386/w4031

Published: American Economic Review, vol 83, no 4, pp 1022-1033, Sept. 1993 citation courtesy of

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