The Psychological Externalities of Investing: Evidence from Stock Returns and Crime

• 成果类型: Article
• 署名作者: Huck, John R.
• 署名单位: University of Wisconsin System; University of Wisconsin Milwaukee
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhad090
• 发表日期: 2023
• 页码: 2273
• 关键词: business cycles; UNITED-STATES; MARKET; earnings; VIOLENCE; RISK; preferences; INEQUALITY; serotonin; Sentiment

摘要

This paper investigates the psychological effects from stock market returns. Using an FBI database of over 55 million daily reported crime incidents across the United States, crime is proposed as a measure of psychological well-being. The evidence suggests that stock returns affect the well-being of not only investors but also noninvestors. Specifically, a contemporaneous negative (positive) relationship between daily stock market returns and violent crime rates is found for investors (noninvestors). A similar relationship is also found between local earnings surprises and violent crime. The contrasting relationships for investors and noninvestors suggests that relative wealth may influence well-being.