In the Mood to Consume: Effect of Sunshine on Credit Card Spending

40 Pages Posted: 23 Oct 2017 Last revised: 14 May 2019

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Souphala Chomsisengphet

Office of the Comptroller of the Currency (OCC)

Stephan Meier

Columbia University - Columbia Business School

Xin Zou

Hong Kong Baptist University (HKBU)

Date Written: May 13, 2019

Abstract

Using large, representative sample of high frequency credit card transactions in United States, this paper examines the causal effect of sunshine-induced mood on contemporaneous household credit card spending. We document a significant positive relation between daily abnormal sunshine and credit card spending amount. One standard deviation increase in abnormal sunshine leads to around 1 percent increase in daily credit card spending amount. The effect manifests in long-term, durable goods spending, and exists among consumers with various characteristics. The sunshine effect is not driven by extreme weather conditions, and does not significantly affect number of purchases.

Keywords: Credit Cards, Mood, Sunshine, Household Finance, Consumption

JEL Classification: D12, D14, E21, H31

Suggested Citation

Agarwal, Sumit and Chomsisengphet, Souphala and Meier, Stephan and Zou, Xin, In the Mood to Consume: Effect of Sunshine on Credit Card Spending (May 13, 2019). Columbia Business School Research Paper No. 17-104. Available at SSRN: https://ssrn.com/abstract=3014541 or http://dx.doi.org/10.2139/ssrn.3014541

Sumit Agarwal

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Souphala Chomsisengphet

Office of the Comptroller of the Currency (OCC) ( email )

400 7th Street, SW
Washington, DC 20219
United States
202-649-5533 (Phone)

Stephan Meier

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Xin Zou (Contact Author)

Hong Kong Baptist University (HKBU) ( email )

Kowloon
Hong Kong

HOME PAGE: http://sites.google.com/site/shirleyxinzou/

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