'O Sole Mio: An Experimental Analysis of Weather and Risk Attitudes in Financial Decisions
UNC Chapel Hill
University of North Carolina Kenan-Flagler Business School
University of North Carolina Kenan-Flagler Business School; European Corporate Governance Institute (ECGI)
November 23, 2012
While weather has been shown to affect financial markets and financial decision making, a still open question is the channel through which such influence is exerted. By employing a multiple price list method, this paper provides direct experimental evidence that sunshine and good weather promote risk taking behavior. This effect is present whether relying on objective measures of meteorological conditions or subjective weather assessments. Finally, employing a psychological test, we find evidence that weather may affect individual risk tolerance through its effect on mood.
Number of Pages in PDF File: 38
Keywords: Experiments, Risk Aversion, Weather, Sunshine
JEL Classification: C91, D03, G02
Date posted: November 12, 2011 ; Last revised: November 30, 2013
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