Valuing Peace: The Effects of Financial Market Exposure on Votes and Political Attitudes

73 Pages Posted: 16 Jan 2016 Last revised: 27 Mar 2017

Saumitra Jha

Stanford Graduate School of Business

Moses Shayo

The Hebrew University of Jerusalem - Department of Economics

Date Written: March 26, 2017

Abstract

Financial markets expose individuals to the broader economy. Does participation in financial markets also lead citizens to re-evaluate the costs of conflict, their views on politics and even their voting decisions? Prior to the 2015 Israeli elections, we randomly assigned financial assets from Israeli and Palestinian companies to likely voters and gave them incentives to actively trade for up to seven weeks. Exposure to financial markets systematically shifted vote choices and increased support for peace initiatives. We delineate the mechanisms for this change and show that financial market exposure led to learning and reevaluation of the economic costs of conflict.

Keywords: Financial Markets, Conflict, Peace, Political Economy

JEL Classification: C93, D72, D74, N2, O12

Suggested Citation

Jha, Saumitra and Shayo, Moses, Valuing Peace: The Effects of Financial Market Exposure on Votes and Political Attitudes (March 26, 2017). Stanford University Graduate School of Business Research Paper No. 16-7. Available at SSRN: https://ssrn.com/abstract=2716660 or http://dx.doi.org/10.2139/ssrn.2716660

Saumitra Jha (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Moses Shayo

The Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, IL 91905
Israel

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