The CBA/AOL Finance Optimism Index measures Americans’ level of optimism about their personal finances. The index tracks across four important variables: optimism about personal financial future, worry about current finances, whether news about personal finances has been positive, and worry about how the economy and politics affect personal finances. The index is measured continuously, and results are published on a monthly basis.
Finance Optimism Index
I am optimistic about my personal financial future
I am worried about my current financial situation
The news I’ve been hearing in the past few weeks about Americans’ personal finances has been generally positive
I am worried that the current economic and political situation is going to affect my personal finances
The CBA/AOL Finance Optimism Index is calculated based on 4 survey questions asked to a random national sample of approximately 1,600 US Online Adults Ages 18+ every month. AOL and Ipsos continuously field the questions through the AOL/Ipsos MediaCT Brand Tracking Survey, with results reported on a monthly basis. The data is weighted by age, gender, income, region, and household size to demographically represent the adult US online population. The survey results have a 2.5-point margin of error at the 95% confidence level. Tracking of the index survey questions began in October 2013.
Survey respondents are asked to rate how much they agree with each of the following four statements on a four-point scale (Strongly Agree, Somewhat Agree, Somewhat Disagree, and Strongly Disagree):
- I am optimistic about my personal financial future
- I am worried about my current financial situation
- The news I’ve been hearing in the past few weeks about Americans’ personal finances has been generally positive
- I am worried that the current economic and political situation is going to affect my personal finances
To derive the CBA/AOL Finance Optimism Index, each respondent’s average level of optimism is calculated based on their responses to all four statements. Each respondent is then categorized as optimistic or pessimistic based on this average. The average accounts for the difference between “strongly” held and “somewhat” held opinions by assigning “strong” opinions a greater impact on the respondent’s average level of optimism. The difference in the direction of the sentiment of the four statements is also accounted for, i.e., agreement with statements A and C is considered optimistic, whereas agreement with statements B and D is considered pessimistic.*
The value of the index for each month is calculated as the percentage of respondents who are net pessimistic subtracted from the percentage of respondents who are net optimistic in that month. The index can range from +100 (all respondents optimistic) to -100 (all respondents pessimistic).
It is unlikely that the index will fall in the extreme positive and negative ends of the -100 to +100 range, since all Americans are not likely to be optimistic or pessimistic in a given month.
While 0 is the midpoint of the index’s range, it does not necessarily represent the average level of optimism. In studies that measure Americans’ optimism on other topics, Americans tend to be more optimistic on average compared to other countries. It is possible that an average level of optimism for Americans will fall on the positive side of the range.
* Each respondent’s ratings for the four statements is assigned a value from 1 to 4, with 4 being the most optimistic rating for that statement and 1 being the most pessimistic rating for that statement. This calculation accounts for the difference in the direction of the sentiment of the four statements. E.g., a respondent that “strongly agrees” with the positive statement “I am optimistic about my personal financial future” is assigned a 4 for that statement. A respondent that “strongly agrees” with the negative statement “I am worried about my current financial situation” is assigned a 1 for that statement. The 4 point scale also ensures that “strongly” held opinions have a greater impact on the respondent’s average level of optimism than “somewhat” held opinions. E.g., a respondent that “strongly agrees” with the statement “I am optimistic about my personal financial future” is assigned a 4 for that statement. A respondent that “somewhat agrees” with that statement is assigned a 3.
A respondent’s average level of optimism is the mean of his 4 statement scores. Respondents with average level of optimism above or equal to the midpoint of the 4-point scale (≥ 2.5) are considered optimistic, and respondents with average level of optimism below the midpoint of the scale (<2.5) are considered pessimistic.
Finance Optimism Index History
This report includes a full history of the Finance Optimism Index results along with month to month analysis of changes in the index.
Launch of Optimism Index
The CBA/AOL Finance Optimism Index launched in April 2014. This report provides insight into why the measure of financial optimism is meaningful to the financial services industry, how financial optimism influences consumer behavior, and the first 5 months of results.
For more information on the CBA/AOL Finance Optimism Index, please contact FinanceOptimism@teamaol.com.
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The Consumer Bankers Association (CBA) is the trade association for today's leaders in retail banking - banking services geared toward consumers and small businesses.
Our corporate members (the nation's largest financial institutions, as well as many regional banks) collectively hold two-thirds of the industry's total assets. Our associate members represent the premier providers of goods and services to banks. Member loyalty is reflected in our membership renewal rate, which consistently remains above 90 percent.
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