Does the weather affect how you invest?

Weather variables, and sunshine in particular, are found to be strongly correlated with financial variables. I consider self-reported happiness as a channel through which sunshine affects financial variables. I examine the influence of happiness on risk-taking behavior by instrumenting individual happiness with regional sunshine, and I find that happy people appear to be more risk-averse in financial decisions, and accordingly choose safer investments. Happy people take more time for making decisions and have more self-control. Happy people also expect to live longer and accordingly seem more concerned about the future than the present, and expect less in inflation.

Source: “Weather and Financial Risk-Taking: Is Happiness the Channel?” from the German Socio-Economic Panel Study on Economic Research, August, 2009

Join over 320,000 readers. Get a free weekly update via email here.

Related posts:

New Neuroscience Reveals 4 Rituals That Will Make You Happy

New Harvard Research Reveals A Fun Way To Be More Successful

How To Get People To Like You: 7 Ways From An FBI Behavior Expert

 


Tags:
Posted In:
Post Details