Weather and Financial Risk-Taking: Is Happiness the Channel?
Cahit Guven ()
No 218, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)
Weather variables, and sunshine in particular, are found to be strongly correlated with financial variables. I consider self-reported happiness as a channel through which sunshine affects financial variables. I examine the influence of happiness on risk-taking behavior by instrumenting individual happiness with regional sunshine, and I find that happy people appear to be more risk-averse in financial decisions, and accordingly choose safer investments. Happy people take more time for making decisions and have more self-control. Happy people also expect to live longer and accordingly seem more concerned about the future than the present, and expect less inflation.
Keywords: happiness; risk-taking; climate (search for similar items in EconPapers)
JEL-codes: D1 D91 G11 (search for similar items in EconPapers)
Pages: 58 p.
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Working Paper: Weather and financial risk-taking: is happiness the channel? (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp218
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