a lifecycle perspective of stock market performance and wellbeing 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

the effect of income on mortality evidence from the social security notch abstract legislation in the 1970s created a notch in social security payments with those born after january 1 1917 receiving sharply lower benefits using restricted use versions of the national mortality detail file combined with census data we use this quasi experiment to examine the income mortality link in an elderly population estimates from difference in difference and regression discontinuity models show the higher income group has a statistically significantly higher mortality rate contradicting the previous literature we also found that younger cohorts responded to lower incomes by increasing postretirement work effort suggesting that moderate employment has beneficial health effects for the elderly

the causal effect of income on health evidence from german reunification we investigate whether there was a causal effect of income changes on the health satisfaction of east and west germans in the years following reunification our data source is the german socio economic panel gsoep between 1984 and 2002 and we fit a recently proposed fixed effects ordinal estimator to our health measures and use a causal decomposition technique to account for panel attrition we find evidence of a significant positive effect of income changes on health satisfaction but the quantitative size of this effect is small this is the case with respect to current income and a measure of permanent income

security analysis and trading patterns when some investors receive information before others in existing models of information acquisition all informed investors receive their information at the same time this article analyzes trading behavior and equilibrium information acquisition when some investors receive common private information before others the model implies that under some conditions investors will focus only on a subset of securities herding while neglecting other securities with identical exogenous characteristics in addition the model is consistent with empirical correlations that are suggestive of oft cited trading strategies such as profit taking short term position reversal and following the leader mimicking earlier trades in existing models of information acquisition all informed investors receive their information at the same time while these models provide many important insights in reality some investors either fortuitously or owing to superior skill acquire pertinent information before others by being first an investor can exploit this information to great advantage information that is uncovered only slightly later is less valuable even if it has not yet been publicly revealed we show in this article that the sequential nature of information arrival has a significant effect on both the trading decisions and the types of information collected by investors the model we develop describes the investment choices of a set of competitive risk averse investors who investigate the long term prospects of firms lucky or high ability investors uncover the

do regulations work a comprehensive analysis of price limits and trading restrictions in experimental asset markets with deterministic and stochastic fundamental values abstract we examine how traders react to two prominent stock market regulations under a constant fundamental value fv process price limits and trading restrictions significantly reduce the price level and mispricing size when traders are inexperienced under a markov process fv there is no evidence for these regulations to reduce mispricing the novel markov process also serves as a testbed for several financial hypotheses related to the regulations we find that price limits do not improve reactions to market news and the binding of price limits magnifies the momentum in the price movements these findings suggest that the scope of these regulations is limited and that they can backfire in some market environments

the short term mortality consequences of income receipt many studies find that households increase their co nsumption after the receipt of expected income payments a result inconsistent wit h the life cycle permanent income hypothesis consumption can increase adverse healt h events such as traffic accidents heart attacks and strokes in this pape r we examine the short term mortality consequences of income receipt we find that mortality increases following the arrival of monthly social security payments re gular wage payments for military personnel the 2001 tax rebates and alaska permane nt fund dividend payments the increase in short run mortality is large potential ly eliminating some of the protective benefits of additional income

estimating the effect of income on health and mortality using lottery prizes as an exogenous source of variation in income a vast literature has established a strong positive relation between income and health status and a negative relation with mortality this paper studies the effects of income on health and mortality using only the part of income variation due to a truly exogenous factor monetary lottery prizes of individuals the findings are that higher income causally generates good health and that this effect is of a similar magnitude as when traditional estimation techniques are used a 10 percent income increase improves health by about 4 5 percent of a standard deviation

insights on unemployment unemployment insurance and mental health abstract this paper contributes to the growing literature on the relationship between business cycles and mental health it is one of the first applications in the economics literature to incorporate data on web searches from google insights for search and these unique data allow the opportunity to estimate the association between weekly unemployment insurance ui claims in addition to monthly unemployment rates and search indexes for depression and anxiety results from state fixed effects models yield 1 a positive relationship between the unemployment rate and the depression search index and 2 a negative relationship between initial ui claims on the one hand and the depression and anxiety search indexes on the other a lag analysis also shows that an extended period of higher levels of continued ui claims is associated with a higher depression search index

why is equity order flow so persistent abstract order flow in equity markets is remarkably persistent in the sense that order signs to buy or sell are positively autocorrelated out to time lags of tens of thousands of orders corresponding to many days two possible explanations are herding corresponding to positive correlation in the behavior of different investors or order splitting corresponding to positive autocorrelation in the behavior of single investors we investigate this using order flow data from the london stock exchange for which we have membership identifiers by formulating models for herding and order splitting as well as models for brokerage choice we are able to overcome the distortion introduced by brokerage on timescales of less than a few hours the persistence of order flow is overwhelmingly due to splitting rather than herding we also study the properties of brokerage order flow and show that it is remarkably consistent both cross sectionally and longitudinally

exploring the health wealth nexus the causal links between health and economic resources have long concerned social scientists we use four waves of data from the panel study of income dynamics psid to analyze the impact of wealth upon an individual s health status the difficulty in approaching this task that has bedeviled previous studies is that wealth may be endogenous a priori it is just as likely that changes in health affect wealth as vice versa we argue that inheritance is a suitable instrument for the change in wealth and implement a straightforward instrumental variables strategy to deal with this problem our results suggest that the causal relationship running from wealth to health may not be as strong as first appears in the data wealth exerts a positive and statistically significant effect on health status but it is very small in magnitude instrumental variables estimation leaves the point estimate approximately the same but renders it insignificantly different from zero and even when the point estimate is increased by twice its standard error s e the quantitative effect is small we conclude that the wealth health connection is not driven by short run changes in wealth

macroeconomic conditions and well being do social interactions matter abstractwe investigate the role played by social interactions in the transmission of the effects of macroeconomic conditions on well being using survey data for a representative sample of italian individuals we find that social interactions play a dual role on the one hand the well being of people who spend more time with their friends or go out more often is less sensitive to macroeconomic fluctuations on the other hand social interactions are negatively affected by worsening macroeconomic conditions thus playing a relevant role in the transmission of macroeconomic shocks to subjective well being more specifically the negative impact of downturns on the frequency of going out and active participation in associations significantly contributes to the adverse effects of recessions on satisfaction with life and with individual life domains

the behavior of stock prices around institutional trades all trades executed by 37 large investment management firms from july 1986 to december 1988 are used to study the price impact and execution cost of the entire sequence package of trades that we interpret as an order we find that market impact and trading cost are related to firm capitalization relative package size and most importantly to the identity of the management firm behind the trade money managers with high demands for immediacy tend to be associated with larger market impact financial economists have long studied the equity trading process and its impact on stock prices much prior empirical research isolates individual trades and analyzes the behavior of the stock price around each trade see for example kraus and stoll 1972a holthausen leftwich and mayers 1987 1990 keim and madhavan 1991 petersen and umlauf 1991 hausman lo and mackinlay 1992 and chan and lakonishok 1993 evaluating the behavior of stock prices around trades provides a means of discriminating among various hypotheses as to the elasticity of the demand for stocks yields an estimate of the cost of executing trades and a measure of the liquidity of a market and permits tests of different models of the determination of quotes and transaction prices for many institutional investors however even a moderately sized position in a stock may represent a large fraction of the stock s trading volume accordingly an investment manager s order is often broken up into several trades it is often misleading therefore to consider an individual trade as the basic unit of analysis in the study of trading activity and its effects on prices this paper uses the record of trades executed by 37 large investment manage

income shocks and suicides causal evidence from indonesia we examine how income shocks affect the suicide rate in indonesia we use a difference in differences approach exploiting the cash transfer s nationwide rollout and corroborate the findings using

the role of economic shocks on health evidence from german reunification sudden economic shocks impact the everyday lives of people from one day to the next a number of studies have examined the association between economic fluctuations and health however no consensus on the nature of this relationship has been established by exploiting the dramatic economic fluctuations following the german reunification of 1990 which included a sudden change from a socialist to a capitalist system in east germany this study examines the association between broad negative economic shocks and health the article finds that increases in state unemployment rates are associated with large and statistically significant declines in health outcomes estimates are stronger for people who became unemployed shortly after reunification for low income individuals and for east germans a group confronted with larger economic fluctuations when examining potential mechanisms that could explain the observed health deteriorations the study finds significant reductions in exercise frequency and increases in economic uncertainty and overall stress

liquidity economic activity and mortality abstract we document a within month mortality cycle where deaths decline before the first day of the month and spike after the first this cycle is present across a wide variety of causes and demographic groups a similar cycle exists for a range of economic activities suggesting the mortality cycle may be due to short term variation in levels of economic activity we provide evidence that the within month activity cycle is generated by liquidity our results suggest a causal pathway whereby liquidity problems reduce activity which in turn reduces mortality these relationships may help explain the procyclical nature of mortality

the economics of rumours this paper studies a class of information transmission processes which we call rumours the distinctive features of these processes are that the information transmission takes place in such a way that the recipient does not quite know whether or not to believe the information and that the probability that someone receives the information depends on how many people already have it specifically we study an example in which there is an investment project with returns only known to a few people these people have a cost of undertaking the project and this cost is private information the only information the other agents receive is that someone else has invested they are not told whether that person actually knew the returns or whether he too was just acting on the basis of his observation of others they use their optimal bayesian decision rule to decide whether to invest we show that for a wide class of alternative specifications this decision rule has the property that a positive fraction of those who observe the rumour will not invest in this sense a rumour cannot mislead everybody counter intuitive comparative statics results are obtained for example more information and higher productivity may reduce welfare while changing the speed with which the rumour spreads has no welfare effect

the rise of female professionals are women responding to skill demand for years college educated women were limited mainly to lower paying female dominated professions such as teaching and nursing over the past several decades however there has been a remarkable increase in the percentage of college educated women in higher paying traditionally male professional occupations in 1967 the fraction of college educated women working in these occupations was less than 20 percent by 1997 this number had increased to almost 40 percent this increase is particularly striking when compared to the slightly declining trend among college educated men what can explain this increase in female professionals there are a number of possible explanations one explanation is a demand shift favoring women over men in these highly skilled occupations while the notion of a gender specific demand shift is compelling in the case of high school graduate men and women who work in very different industries and occupations the story is much less convincing for the college educated group collegeeducated men and women work in more similar occupations and are presumably closer substitutes for each other to the extent that they are different the available evidence suggests that this may have worked to the disadvantage of women see francine blau and lawrence kahn 1997 another explanation and the one we focus on in this paper is that college educated women have responded to the rise in overall skill demand a phenomenon which has characterized the u s labor market during the 1980 s and perhaps even as early as the 1970 s an important margin of response for these women may have been labor market participation in 1970 less than 60 percent of college educated women were working the economy wide rise in skill demand may have attracted educated women not only from other occupations but from nonparticipation as well since virtually all college educated men work labor market participation is less likely to be a factor for men while we postulate that the overall increase in skill demand played an important role we are also aware that this is not the only explanation within these high wage professional occupations women s wages rose relative to male wages even as women increased their share this suggests to us that declining discrimination which both made it easier for women to enter these occupations and resulted in wage convergence vis a vis the male workers or unobserved skill upgrading also may have played a role in addition the spread of more effective birthcontrol devices roe v wade and no fault divorce laws just to name a few of the factors which changed marriage and fertility patterns of women also most likely contributed to women s willingness and ability to invest in career jobs see claudia goldin and lawrence katz 2000

the impact of stock market fluctuations on the mental and physical well being of children the stock market crash of 2008 caused a severe impact to households earlier research has explored the impacts of a stock market crash on life well being psychological stress and adult health behaviors we extend this literature by documenting impacts of stock market fluctuations on a range of child outcomes including effects on both mental and physical health we show a negative effect of a market crash on hospitalizations child reported health status sick days from school and an aggregate health index measure both graphical and regression based analysis reveal that our results are not driven by a preexisting trend of declining child health before the market crash and extensive sensitivity analysis demonstrates that the results are robust to multiple empirical specifications jel i15 e32 j13

recession depression mental health effects of the 2008 stock market crash do sudden large wealth losses affect mental health we use exogenous variation in the interview dates of the 2008 health and retirement study to assess the impact of large wealth losses on mental health among older u s adults we compare cross wave changes in wealth and mental health for respondents interviewed before and after the october 2008 stock market crash we find that the crash reduced wealth and increased feelings of depression and use of antidepressant drugs and that these effects were largest among respondents with high levels of stock holdings prior to the crash these results suggest that sudden wealth losses cause immediate declines in subjective measures of mental health however we find no evidence that wealth losses lead to increases in clinically validated measures of depressive symptoms or indicators of depression

stock market crash and expectations of american households this paper utilizes data on subjective probabilities to study the impact of the stock market crash of 2008 on households expectations about the returns on the stock market index we use data from the health and retirement study that was fielded in february 2008 through february 2009 the effect of the crash is identified from the date of the interview which is shown to be exogenous to previous stock market expectations we estimate the effect of the crash on the population average of expected returns the population average of the uncertainty about returns subjective standard deviation and the cross sectional heterogeneity in expected returns disagreement we show estimates from simple reduced form regressions on probability answers as well as from a more structural model that focuses on the parameters of interest and separates survey noise from relevant heterogeneity we find a temporary increase in the population average of expectations and uncertainty right after the crash the effect on cross sectional heterogeneity is more significant and longer lasting which implies substantial long term increase in disagreement the increase in disagreement is larger among the stockholders the more informed and those with higher cognitive capacity and disagreement co moves with trading volume and volatility in the market

crash and wait the impact of the great recession on the retirement plans of older americans this study uses data from pre and post crash surveys from the cognitive economics study to examine the impact of recent stock and labor market wealth losses on the planned retirement ages of older americans regression estimates imply that the average wealth loss between july 2008 and may june 2009 is associated with an increase in planned retirement age of approximately 2 5 months furthermore pessimism about future stock market returns is found to amplify the impact of wealth losses on retirement timing