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

  • Anita Ratcliffe

    ()

    (Department of Economics,)

  • Karl Taylor

    ()

    (Department of Economics, The University of Sheffield)

This paper investigates the correlation between stock prices and mental wellbeing, exploiting the availability of interview dates in the British Household Panel Survey to match the level and changes in the FTSE 100 stock price index to respondents over the period 1991-2008. We present evidence that the level, 6 month and yearly changes in the price index are associated with better mental wellbeing while greater uncertainty, proxied by volatility in the price index, is associated with poorer mental wellbeing. Moreover, using several proxies of stockholder status, we find little evidence that this association is confined to holders of equity-based assets, which is inconsistent with a pure wealth effect.

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File URL: http://www.shef.ac.uk/economics/research/serps/articles/2012_021.html
File Function: Revised version, 2013
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Paper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2012021.

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Length: 30 pages
Date of creation: 2013
Handle: RePEc:shf:wpaper:2012021
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  10. Thomas Crossley & Hamish Low & Cormac O'Dea, 2011. "Household consumption through recent recessions," IFS Working Papers W11/18, Institute for Fiscal Studies.
  11. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
  12. Di Tella, R. & MacCulloch, R.J.: Oswald, A.J., 1997. "The Macroeconomics of Happiness," Papers 19, Centre for Economic Performance & Institute of Economics.
  13. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2005. "Trusting the Stock Market," NBER Working Papers 11648, National Bureau of Economic Research, Inc.
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  18. repec:pri:cepsud:125krueger is not listed on IDEAS
  19. Roberts, Jennifer & Hodgson, Robert & Dolan, Paul, 2011. "“It's driving her mad”: Gender differences in the effects of commuting on psychological health," Journal of Health Economics, Elsevier, vol. 30(5), pages 1064-1076.
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