TY - JOUR
T1 - A lifecycle perspective of stock market performance and wellbeing
AU - Frijters, Paul
AU - Johnston, David W.
AU - Shields, Michael A.
AU - Sinha, Kompal
PY - 2015/4
Y1 - 2015/4
N2 - We estimate the effect of stock market fluctuations on subjective wellbeing and mental health using Australian survey data over the period 2001-2012, which includes the global financial crisis. A particular innovation of the paper is the use of three satisfaction measures - overall, financial, employment - and the use of a stylised lifecycle investment model. These features, coupled with a robust identification strategy based on comparing survey respondents interviewed in the same quarter and location, allow us to better understand individual reactions to stock market changes. We find that stock market increases lead to a significant but modest improvements in life satisfaction and mental health. This effect is driven by young and middle-aged males, and is stronger for those with direct exposure to the stock market. For young cohorts, the stock market index acts as a leading indicator of employment prospects, whilst for older cohorts it acts directly on financial satisfaction. (C) 2015 Elsevier B.V. All rights reserved.
AB - We estimate the effect of stock market fluctuations on subjective wellbeing and mental health using Australian survey data over the period 2001-2012, which includes the global financial crisis. A particular innovation of the paper is the use of three satisfaction measures - overall, financial, employment - and the use of a stylised lifecycle investment model. These features, coupled with a robust identification strategy based on comparing survey respondents interviewed in the same quarter and location, allow us to better understand individual reactions to stock market changes. We find that stock market increases lead to a significant but modest improvements in life satisfaction and mental health. This effect is driven by young and middle-aged males, and is stronger for those with direct exposure to the stock market. For young cohorts, the stock market index acts as a leading indicator of employment prospects, whilst for older cohorts it acts directly on financial satisfaction. (C) 2015 Elsevier B.V. All rights reserved.
KW - Health
KW - Satisfaction
KW - Stock market
KW - Wellbeing
UR - http://www.scopus.com/inward/record.url?scp=84923357218&partnerID=8YFLogxK
U2 - 10.1016/j.jebo.2015.02.004
DO - 10.1016/j.jebo.2015.02.004
M3 - Article
SN - 0167-2681
VL - 112
SP - 237
EP - 250
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
ER -