Weather and Financial Risk-Taking: Is Happiness the Channel?
AbstractWeather variables, and sunshine in particular, are found to be strongly correlated with financial variables. I consider self-reported happiness as a channel through which sunshine affects financial variables. I examine the influence of happiness on risk-taking behavior by instrumenting individual happiness with regional sunshine, and I find that happy people appear to be more risk-averse in financial decisions, and accordingly choose safer investments. Happy people take more time for making decisions and have more self-control. Happy people also expect to live longer and accordingly seem more concerned about the future than the present, and expect less inflation.
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Bibliographic InfoPaper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 218.
Length: 58 p.
Date of creation: 2009
Date of revision:
happiness; risk-taking; climate;
Other versions of this item:
- Cahit Guven, 2009. "Weather and Financial Risk-Taking: Is Happiness the Channel?," Economics Series 2009_06, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
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