Weather, Biorhythms and Stock Returns - Some Preliminary Irish Evidence

33 Pages Posted: 7 Jan 2003

See all articles by Brian M. Lucey

Brian M. Lucey

Trinity Business School, Trinity College Dublin; Ho Chi Minh City University of Economics and Finance; Jiangxi University of Finance and Economics

Michael M. Dowling

Dublin City University Business School; ESC Rennes School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: October 2004

Abstract

We investigate whether there exists a relationship between eight proxy variables for investor mood (based on the weather, biorhythms, and beliefs) and daily Irish stock returns over the period 1988 to 2001. Our study is motivated by recent research which argues that people's decisions are influenced by their feelings, especially when the decision involves risk and uncertainty (e.g. Loewenstein et al., 2001). We find that some of the variables proposed in the literature (rain and time changes around daylight savings) are minor but significant influences. We also find preliminary evidence for the relationship between mood proxy variables and equity returns being more pronounced in times of positive recent market performance. This finding is consistent with psychological research showing that people in a good mood (in this case, because of presumed gains in their investment portfolios) are more likely to allow irrelevant mood factors to influence their decision-making (e.g. Mackie and Worth, 1991).

Keywords: weather effect, market efficiency, mood, anomaly

JEL Classification: G12, G14

Suggested Citation

Lucey, Brian M. and Dowling, Michael M., Weather, Biorhythms and Stock Returns - Some Preliminary Irish Evidence (October 2004). Available at SSRN: https://ssrn.com/abstract=345000 or http://dx.doi.org/10.2139/ssrn.345000

Brian M. Lucey

Trinity Business School, Trinity College Dublin ( email )

The Sutherland Centre, Level 6, Arts Building
Dublin 2
Ireland
+353 1 608 1552 (Phone)
+353 1 679 9503 (Fax)

Ho Chi Minh City University of Economics and Finance ( email )

59C Nguyen D├Čnh Chieu
6th Ward, District 3
Ho Chi Minh City, Ho Chi Minh 70000
Vietnam

Jiangxi University of Finance and Economics ( email )

South Lushan Road
Nanchang, Jiangxi 330013
China

Michael M. Dowling (Contact Author)

Dublin City University Business School ( email )

Dublin 9
Ireland

ESC Rennes School of Business ( email )

Rue Robert d'arbrissel, 2
Rennes, 35000
France

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