In the Mood to Consume: Effect of Sunshine on Credit Card Spending
46 Pages Posted: 23 Oct 2017 Last revised: 23 Mar 2020
Date Written: March 22, 2020
Using a large, representative sample of high-frequency credit card transactions in the United States, this paper examines the causal effect of sunshine-induced mood on contemporaneous household credit card spending. We document a 0.3 percent increase in credit card spending in response to a one unit increase in same-day local abnormal sunshine. The spending response is stronger for consumers with higher credit card debt, lower FICO score, and shorter tenure with the bank. The effect manifests in long-term, durable goods spending, and is not driven by other weather conditions, complementarity between sunshine and consumption, or intentional choice of consumption time. We document similar responses from spending on goods with and without salient sunshine-relevant features and during times with high and low sunshine levels. Finally, the sunshine effect occurs in consumers with various characteristics.
Keywords: Credit Cards, Mood, Sunshine, Household Finance, Consumption
JEL Classification: D12, D14, E21, H31
Suggested Citation: Suggested Citation