IDEAS home Printed from https://ideas.repec.org/a/oup/rfinst/v28y2015i1p73-111..html
   My bibliography  Save this article

Weather-Induced Mood, Institutional Investors, and Stock Returns

Author

Listed:
  • William N. Goetzmann
  • Dasol Kim
  • Alok Kumar
  • Qin Wang

Abstract

This study shows that weather-based indicators of mood impact perceptions of mispricing and trading decisions of institutional investors. Using survey and disaggregated trade data, we show that relatively cloudier days increase perceived overpricing in individual stocks and the Dow Jones Industrial Index and increase selling propensities of institutions. We introduce stock-level measures of investor mood; investor optimism positively impacts stock returns among stocks with higher arbitrage costs, and stocks experiencing similar investor mood exhibit return comovement. These findings complement existing studies on how weather impacts stock index returns and identify another channel through which it can manifest.

Suggested Citation

  • William N. Goetzmann & Dasol Kim & Alok Kumar & Qin Wang, 2015. "Weather-Induced Mood, Institutional Investors, and Stock Returns," The Review of Financial Studies, Society for Financial Studies, vol. 28(1), pages 73-111.
    • Handle: RePEc:oup:rfinst:v:28:y:2015:i:1:p:73-111.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/rfs/hhu063
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:rfinst:v:28:y:2015:i:1:p:73-111.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/sfsssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.