In the Mood to Consume: Effect of Sunshine on Credit Card Spending
40 Pages Posted: 23 Oct 2017 Last revised: 14 May 2019
Date Written: May 13, 2019
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: Suggested Citation