Exogenous Surprises and Emotional Outcomes: An Analysis of Well-Being Dynamics. How has the happiness and optimism of Italians been affected by the US 2024 election result?

This paper investigates the emotional impact of exogenous political shocks on individual well-being by examining how Italian citizens’ optimism and happiness responded to the unexpected outcome of the 2024 U.S. presidential election. Leveraging a unique two-wave panel dataset collected before and after the election, we implement a difference-in-differences design to estimate the causal effect of electoral surprise. Respondents who had confidently predicted a Kamala Harris victory and were subsequently surprised by Donald Trump’s re-election exhibited a significant decline in self-reported happiness, controlling for individual characteristics. We interpret this as evidence of the emotional cost of unexpected geopolitical outcomes, even when such events occur abroad. Our findings underscore the conceptual distinction between optimism (a forward-looking cognitive disposition) and happiness (an affective state), showing that optimism may amplify both the emotional gains from positive outcomes and the emotional costs of negative surprises. The analysis contributes to the literature on subjective well-being by highlighting the role of global events in shaping personal affective responses and by emphasizing the need to account for exogenous shocks in models of life satisfaction. Finally, we discuss implications for future research on the causal relationship between optimism and happiness and suggest methodological strategies for disentangling endogeneity between the two constructs.