This paper provides evidence that daily fluctuations in the stock market have important – and hitherto neglected – spillover effects on fatal car accidents. Using the universe of fatal car accidents in the United States from 1990 to 2015, we find that a one standard deviation reduction in daily stock market returns is associated with a 0.6% increase in fatal car accidents that happen after the stock market opening. A battery of falsification tests supports a causal interpretation of this finding. Our results are consistent with immediate emotions stirred by a negative stock market performance influencing the number of fatal accidents, in particular among inexperienced investors.
When the market drives you crazy: Stock market returns and fatal car accidents
Tonin M;
2020-01-01
Abstract
This paper provides evidence that daily fluctuations in the stock market have important – and hitherto neglected – spillover effects on fatal car accidents. Using the universe of fatal car accidents in the United States from 1990 to 2015, we find that a one standard deviation reduction in daily stock market returns is associated with a 0.6% increase in fatal car accidents that happen after the stock market opening. A battery of falsification tests supports a causal interpretation of this finding. Our results are consistent with immediate emotions stirred by a negative stock market performance influencing the number of fatal accidents, in particular among inexperienced investors.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
