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In the mood to consume: Effect of sunshine on credit card spending

Author

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  • Agarwal, Sumit
  • Chomsisengphet, Souphala
  • Meier, Stephan
  • Zou, Xin

Abstract

Using a large, representative sample of high-frequency credit card transactions in the United States, this paper examines the causal effect of sunshine-induced mood on contemporaneous household credit card spending. We document a 0.3 percent increase in credit card spending in response to a one-unit increase in the same-day local abnormal sunshine. The spending response is stronger for consumers with higher credit card debt, lower FICO score, and shorter tenure with the bank. The effect manifests in long-term, durable goods spending, and is not driven by other weather conditions, complementarity between sunshine and consumption, or intentional choice of consumption time. We document similar responses of spending on seasonal and non-seasonal goods and during times with high and low sunshine levels. Finally, the sunshine effect occurs among consumers with various characteristics.

Suggested Citation

  • Agarwal, Sumit & Chomsisengphet, Souphala & Meier, Stephan & Zou, Xin, 2020. "In the mood to consume: Effect of sunshine on credit card spending," Journal of Banking & Finance, Elsevier, vol. 121(C).
  • Handle: RePEc:eee:jbfina:v:121:y:2020:i:c:s0378426620302223
    DOI: 10.1016/j.jbankfin.2020.105960
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    More about this item

    Keywords

    Credit cards; Mood; Sunshine; Household finance; Consumption;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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