When the Market Drives you Crazy: Stock Market Returns and Fatal Car Accidents

Corrado Giulietti, Mirco Tonin and Michael Vlassopoulos

No 7182, CESifo Working Paper Series from CESifo

Abstract: The stock market influences some of the most fundamental economic decisions of investors, such as consumption, saving, and labor supply, through the financial wealth channel. This pa-per provides evidence that daily fluctuations 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 de- viation 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 perfor-mance influencing the number of fatal accidents, in particular among inexperienced investors, thus highlighting the broader economic and social consequences of stock market fluctuations.

Keywords: stock market; car accidents; emotions (search for similar items in EconPapers)
JEL-codes: D91 G41 R41 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: When the market drives you crazy: Stock market returns and fatal car accidents (2020)
Working Paper: When the market drives you crazy: Stock market returns and fatal car accidents (2018)
Working Paper: When the market drives you crazy: Stock market returns and fatal car accidents (2018)
Working Paper: When the Market Drives You Crazy: Stock Market Returns and Fatal Car Accidents (2018)
Working Paper: When the market drives you crazy: Stock market returns and fatal car accidents (2018)
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