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Who Cares about Stock Market Booms and Busts? Evidence from Data on Mental Health

Author

Listed:
  • Ratcliffe, Anita

    () (University of Sheffield)

  • Taylor, Karl

    () (University of Sheffield)

Abstract

This paper investigates the relationship between share prices and mental health, exploiting the availability of interview dates in the British Household Panel Survey to match the level and changes in the FTSE All Share price index to respondents over the period 1991-2008. We present evidence that the level, 6 month and yearly changes in the share price index are associated with better mental health while greater uncertainty, as measured by index volatility, is associated with poorer mental well-being. Finally, using several proxies of investor status, we find little evidence that this relationship is confined to holders of equity based assets, suggesting that the observed relationship does not arise via wealth effects. Instead, it appears as though share prices matter to mental health because they perform the role of economic barometer.

Suggested Citation

  • Ratcliffe, Anita & Taylor, Karl, 2012. "Who Cares about Stock Market Booms and Busts? Evidence from Data on Mental Health," IZA Discussion Papers 6956, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6956
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    References listed on IDEAS

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    Cited by:

    1. Frijters, Paul & Johnston, David W. & Shields, Michael A. & Sinha, Kompal, 2015. "A lifecycle perspective of stock market performance and wellbeing," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 237-250.
    2. Emilio, Colombo & Valentina, Rotondi & Luca, Stanca, 2016. "Macroeconomic Conditions and Well-being: Do Social Interactions Matter?," Working Papers 355, University of Milano-Bicocca, Department of Economics, revised 31 Dec 2016.
    3. Tonzer, Lena, 2017. "Uncertainty, financial crises, and subjective well-being," IWH Discussion Papers 2/2017, Halle Institute for Economic Research (IWH).

    More about this item

    Keywords

    share prices; economic conditions; mental health;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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