The Dow is Killing Me: Risky Health Behaviors and the Stock Market
AbstractWe investigate how risky health behaviors and self - reported health vary with the Dow Jones Industrial Average (DJIA) and during stock market crashes. Because stock market indices are leading indicators of economic performance, this research contributes to our understanding of the macroeconomic determinants of health. Existing studies typically rely on the unemployment rate to proxy for economic performance, but this measure captures only one of many channels through which the economic environment may influence individual health decisions. We find that large, negative monthly DJIA returns, decreases in the level of the DJIA, and stock market crashes are widely associated with worsening self-reported mental health and more cigarette smoking, binge drinking, and fatal car accidents involving alcohol. These results are consistent with predictions from rational addiction models and have implications for research on the association between consumption and stock prices.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy in its series Working Papers with number 20.
Length: 48 pages
Date of creation: Jun 2013
Date of revision:
stock market; risky health behaviors; business cycle; alcohol; cigarettes;
Find related papers by JEL classification:
- I1 - Health, Education, and Welfare - - Health
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- G1 - Financial Economics - - General Financial Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-16 (All new papers)
- NEP-CBE-2013-11-16 (Cognitive & Behavioural Economics)
- NEP-HEA-2013-11-16 (Health Economics)
- NEP-MAC-2013-11-16 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Krüger, Niclas A & Svensson, Mikael, 2008.
"Good Times Are Drinking Times: Empirical Evidence on Business Cycles an Alcohol Sales in Sweden 1861-2000,"
2008:2, Örebro University, School of Business.
- Niclas Kruger & Mikael Svensson, 2010. "Good times are drinking times: empirical evidence on business cycles and alcohol sales in Sweden 1861-2000," Applied Economics Letters, Taylor & Francis Journals, vol. 17(6), pages 543-546.
- Cotti, Chad D. & Walker, Douglas M., 2010. "The impact of casinos on fatal alcohol-related traffic accidents in the United States," Journal of Health Economics, Elsevier, vol. 29(6), pages 788-796, December.
- Dee, Thomas S., 1999. "State alcohol policies, teen drinking and traffic fatalities," Journal of Public Economics, Elsevier, vol. 72(2), pages 289-315, May.
- McInerney, Melissa & Mellor, Jennifer M. & Nicholas, Lauren Hersch, 2013.
"Recession depression: Mental health effects of the 2008 stock market crash,"
Journal of Health Economics,
Elsevier, vol. 32(6), pages 1090-1104.
- Melissa McInerney & Jennifer M. Mellor & Lauren Hersch Nicholas, 2013. "Recession Depression: Mental Health Effects of the 2008 Stock Market Crash," CESifo Working Paper Series 4263, CESifo Group Munich.
- Scott Adams & McKinley L. Blackburn & Chad D. Cotti, 2012. "Minimum Wages and Alcohol-Related Traffic Fatalities among Teens," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 828-840, August.
- R. Mehra & E. Prescott, 2010.
"The equity premium: a puzzle,"
Levine's Working Paper Archive
1401, David K. Levine.
- Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004.
"How Much Should We Trust Differences-in-Differences Estimates?,"
The Quarterly Journal of Economics,
MIT Press, vol. 119(1), pages 249-275, February.
- Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
- Tefft, Nathan, 2011. "Insights on unemployment, unemployment insurance, and mental health," Journal of Health Economics, Elsevier, vol. 30(2), pages 258-264, March.
- Christopher J. Ruhm & William E. Black, 2001.
"Does Drinking Really Decrease in Bad Times?,"
NBER Working Papers
8511, National Bureau of Economic Research, Inc.
- Christopher Ruhm, 1994.
"Economic Conditions and Alcohol Problems,"
NBER Working Papers
4914, National Bureau of Economic Research, Inc.
- Stock, J.H. & Watson, M.W., 1989.
"New Indexes Of Coincident And Leading Economic Indicators,"
178d, Harvard - J.F. Kennedy School of Government.
- James H. Stock & Mark W. Watson, 1989. "New Indexes of Coincident and Leading Economic Indicators," NBER Chapters, in: NBER Macroeconomics Annual 1989, Volume 4, pages 351-409 National Bureau of Economic Research, Inc.
- Becker, Gary S & Murphy, Kevin M, 1988.
"A Theory of Rational Addiction,"
Journal of Political Economy,
University of Chicago Press, vol. 96(4), pages 675-700, August.
- Gary S. Becker & Kevin M. Murphy, 1986. "A Theory of Rational Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 41, Chicago - Center for Study of Economy and State.
- Cotti Chad & Tefft Nathan, 2011. "Decomposing the Relationship between Macroeconomic Conditions and Fatal Car Crashes during the Great Recession: Alcohol- and Non-Alcohol-Related Accidents," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-24, August.
- Steven D. Levitt & Jack Porter, 2001. "How Dangerous Are Drinking Drivers?," Journal of Political Economy, University of Chicago Press, vol. 109(6), pages 1198-1237, December.
- Freeman, Donald G., 1999. "A note on 'Economic conditions and alcohol problems'," Journal of Health Economics, Elsevier, vol. 18(5), pages 659-668, October.
- Charles, Kerwin Kofi & DeCicca, Philip, 2008. "Local labor market fluctuations and health: Is there a connection and for whom?," Journal of Health Economics, Elsevier, vol. 27(6), pages 1532-1550, December.
- Ettner, Susan L., 1997. "Measuring the human cost of a weak economy: Does unemployment lead to alcohol abuse?," Social Science & Medicine, Elsevier, vol. 44(2), pages 251-260, January.
- Breeden, Douglas T., 1979. "An intertemporal asset pricing model with stochastic consumption and investment opportunities," Journal of Financial Economics, Elsevier, vol. 7(3), pages 265-296, September.
- Brenner, M. Harvey & Mooney, Anne, 1983. "Unemployment and health in the context of economic change," Social Science & Medicine, Elsevier, vol. 17(16), pages 1125-1138, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.