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Who Cares about Stock Market Booms and Busts? Evidence from Data on Mental Health

Author

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  • Ratcliffe, Anita

    (University of Sheffield)

  • Taylor, Karl

    (University of Sheffield)

Abstract

This paper investigates the relationship between share prices and mental health, exploiting the availability of interview dates in the British Household Panel Survey to match the level and changes in the FTSE All Share price index to respondents over the period 1991-2008. We present evidence that the level, 6 month and yearly changes in the share price index are associated with better mental health while greater uncertainty, as measured by index volatility, is associated with poorer mental well-being. Finally, using several proxies of investor status, we find little evidence that this relationship is confined to holders of equity based assets, suggesting that the observed relationship does not arise via wealth effects. Instead, it appears as though share prices matter to mental health because they perform the role of economic barometer.

Suggested Citation

  • Ratcliffe, Anita & Taylor, Karl, 2012. "Who Cares about Stock Market Booms and Busts? Evidence from Data on Mental Health," IZA Discussion Papers 6956, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6956
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    Cited by:

    1. Alex Bryson & Andrew E. Clark & Colin P. Green, 2021. "Footsie, Yeah! Share Prices and Worker Wellbeing," DoQSS Working Papers 21-26, Quantitative Social Science - UCL Social Research Institute, University College London.
    2. Giulietti, Corrado & Tonin, Mirco & Vlassopoulos, Michael, 2020. "When the market drives you crazy: Stock market returns and fatal car accidents," Journal of Health Economics, Elsevier, vol. 70(C).
    3. Tonzer, Lena, 2017. "Uncertainty, financial crises, and subjective well-being," IWH Discussion Papers 2/2017, Halle Institute for Economic Research (IWH).
    4. Katarzyna Czech & Michał Wielechowski & Richard Barichello, 2023. "The shock of war: do trade relations impact the reaction of stock markets to the Russian invasion of Ukraine?," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 1, pages 14-27.
    5. Singh, Vikkram & Roca, Eduardo & Li, Bin, 2021. "Effectiveness of policy interventions during financial crises in China and Russia: Lessons for the COVID-19 pandemic," Journal of Policy Modeling, Elsevier, vol. 43(2), pages 253-277.
    6. Emilio Colombo & Valentina Rotondi & Luca Stanca, 2018. "Macroeconomic conditions and well-being: do social interactions matter?," Applied Economics, Taylor & Francis Journals, vol. 50(28), pages 3029-3038, June.
    7. Muhammad Ali Nasir & Muhammad Shahbaz & Trinh Thi Mai & Moade Shubita, 2021. "Development of Vietnamese stock market: Influence of domestic macroeconomic environment and regional markets," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 1435-1458, January.
    8. Jane M Fry & Lisa Farrell, 2023. "Road accidents: unexpected costs of stock market movements," Oxford Economic Papers, Oxford University Press, vol. 75(1), pages 233-255.
    9. Elena Lagomarsino & Alessandro Spiganti, 2020. "No gain in pain: psychological well-being, participation, and wages in the BHPS," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(9), pages 1375-1389, December.
    10. Ningyu Tang & Jingqiu Chen & Kaili Zhang & Thomas Li-Ping Tang, 2018. "Monetary Wisdom: How Do Investors Use Love of Money to Frame Stock Volatility and Enhance Stock Happiness?," Journal of Happiness Studies, Springer, vol. 19(6), pages 1831-1862, August.
    11. Sarah Brown & Mark N. Harris & Preety Srivastava & Karl Taylor, 2018. "Mental Health and Reporting Bias: Analysis of the GHQ - 12," Working Papers 2018013, The University of Sheffield, Department of Economics.
    12. Frijters, Paul & Johnston, David W. & Shields, Michael A. & Sinha, Kompal, 2015. "A lifecycle perspective of stock market performance and wellbeing," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 237-250.
    13. Chen, Zisen & James, Jonathan, 2022. "Put your FTSE down: Wealth shocks and road traffic collisions," Social Science & Medicine, Elsevier, vol. 314(C).
    14. Tonzer Lena, 2019. "Elevated Uncertainty during the Financial Crisis: Do Effects on Subjective Well-Being Differ across European Countries?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-15, April.

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    More about this item

    Keywords

    share prices; economic conditions; mental health;
    All these keywords.

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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