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The Dow is Killing Me: Risky Health Behaviors and the Stock Market

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  • Cotti, Chad
  • Dunn, Richard A.
  • Tefft, Nathan

Abstract

We 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.

Suggested Citation

  • Cotti, Chad & Dunn, Richard A. & Tefft, Nathan, 2013. "The Dow is Killing Me: Risky Health Behaviors and the Stock Market," Working Paper series 159976, University of Connecticut, Charles J. Zwick Center for Food and Resource Policy.
    • Handle: RePEc:ags:ucozwp:159976
    DOI: 10.22004/ag.econ.159976
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    More about this item

    Keywords

    Risk and Uncertainty;

    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

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