O Sole Mio: An Experimental Analysis of Weather and Risk Attitudes in Financial Decisions

Although weather has been shown to affect financial markets and financial decision making, a still open question is the channel through which such influence is exerted. By employing a multiple price list method, this paper provides direct experimental evidence that sunshine and good weather promote...

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Bibliographic Details
Published inThe Review of financial studies Vol. 26; no. 7; pp. 1824 - 1852
Main Authors Bassi, Anna, Colacito, Riccardo, Fulghieri, Paolo
Format Journal Article
LanguageEnglish
Published Oxford Oxford University Press 01.07.2013
Oxford Publishing Limited (England)
Subjects
Capital market
Decision making
Economic behaviour
Economic psychology
Emotional states
Experimental methods
Financial risk
Investment decision
Investment risk
Lotteries
Precipitation
Questionnaires
Risk aversion
Risk management
Securities markets
Statistical significance
Studies
Weather
Weather conditions
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Summary:Although weather has been shown to affect financial markets and financial decision making, a still open question is the channel through which such influence is exerted. By employing a multiple price list method, this paper provides direct experimental evidence that sunshine and good weather promote risk-taking behavior. This effect is present whether relying on objective measures of meteorological conditions or subjective weather assessments. Finally, employing a psychological test, we find evidence that weather may affect individual risk tolerance through its effect on mood.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0893-9454
1465-7368
DOI:10.1093/rfs/hht004