Let the Sunshine In? The Effects of Luminance on Economic Preferences, Choice Consistency and Dominance Violations
36 Pages Posted: 22 May 2015 Last revised: 17 Jan 2017
Date Written: January 1, 2017
Weather, in particular the intensity and duration of sunshine (luminance), has been shown to significantly affect market outcomes. Yet, because of the complexity of market interactions we do not know how human behavior is affected by luminance in a way that could inform microeconomic choice models. In this paper, we use data from an incentive-compatible, decision-making experiment conducted daily over a period of two years and from the US Earth System Research Laboratory luminance sensor to investigate the impact of luminance on risk preferences, ambiguity preferences, choice consistency and dominance violations. We find that luminance levels affect all of these. Age and gender influence the strength of some of these effects.
Keywords: weather, decision-making, risk, ambiguity, consistency
JEL Classification: D80
Suggested Citation: Suggested Citation