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When the market drives you crazy: Stock market returns and fatal car accidents

Corrado Giulietti (), Mirco Tonin and Michael Vlassopoulos ()

No BEMPS52, BEMPS - Bozen Economics & Management Paper Series from Faculty of Economics and Management at the Free University of Bozen

Abstract: The stock market in uences some of the most fundamental economic decisions of investors, such as consumption, saving, and labor supply, through the financial wealth channel. This paper provides evidence that daily uctuations in the stock market have important-and hitherto neglected-spillover effects in another, unrelated domain, namely driving. Using the universe of fatal road car accidents in the United States from 1990 to 2015, we find that a one standard deviation reduction in daily stock market returns is associated with a 0.5% increase in the number of fatal accidents. A battery of falsification tests support a causal interpretation of this finding. Our results are consistent with immediate emotions stirred by a negative stock market performance in uencing the number of fatal accidents, in particular among inexperienced investors, thus highlighting the broader economic and social consequences of stock market uctuations.

Keywords: Stock market; Car accidents; Emotions (search for similar items in EconPapers)
JEL-codes: D91 R41 G41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fmk and nep-tre
Date: 2018-07
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http://pro1.unibz.it/projects/economics/repec/bemps52.pdf (application/pdf)

Related works:
Working Paper: When the Market Drives you Crazy: Stock Market Returns and Fatal Car Accidents (2018) Downloads
Working Paper: When the market drives you crazy: Stock market returns and fatal car accidents (2018) Downloads
Working Paper: When the Market Drives You Crazy: Stock Market Returns and Fatal Car Accidents (2018) Downloads
Working Paper: When the market drives you crazy: Stock market returns and fatal car accidents (2018) Downloads
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