Weather and Financial Risk-Taking: Is Happiness the Channel?

61 Pages Posted: 24 Sep 2009

See all articles by Cahit Guven

Cahit Guven

Deakin University - School of Accounting, Economics and Finance

Date Written: August 2009

Abstract

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 nd 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 inflation.

Keywords: happiness, risk-taking, climate

JEL Classification: D01, D91, G11

Suggested Citation

Guven, Cahit, Weather and Financial Risk-Taking: Is Happiness the Channel? (August 2009). SOEPpaper No. 218. Available at SSRN: https://ssrn.com/abstract=1476884 or http://dx.doi.org/10.2139/ssrn.1476884

Cahit Guven (Contact Author)

Deakin University - School of Accounting, Economics and Finance ( email )

221 Burwood Highway
Burwood, Victoria 3215
Australia

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