The Disutility of Stock Market Losses: Evidence From Domestic Violence

• 成果类型: Article
• 署名作者: Lin, Tse-Chun; Pursiainen, Vesa
• 署名单位: University of Hong Kong; National Taiwan University; University of St Gallen; Swiss Finance Institute (SFI)
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhac049
• 发表日期: 2023
• 页码: 1703
• 关键词: intimate partner violence; prospect-theory; equity premium; cross-section; disposition; investors; preference; reluctant; outcomes; returns

摘要

Stock returns during the week are negatively associated with the reported incidence of domestic violence during the weekend. This relationship is primarily driven by negative returns. The incidence of domestic violence increases with the magnitude of losses, and the effect increases with local stock market participation. Our findings suggest that negative wealth shocks caused by stock market crashes can affect stress levels within intimate relationships, escalate arguments, and trigger domestic violence. Stock market losses may reduce household utility beyond the shock to financial wealth, supporting gain-loss models where disutility from losses outweighs the utility from gains of a similar magnitude. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.