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- Title
The Psychological Externalities of Investing: Evidence from Stock Returns and Crime.
- Authors
Huck, John R
- Abstract
This paper investigates the psychological effects from stock market returns. Using an FBI database of over 55 million daily reported crime incidents across the United States, crime is proposed as a measure of psychological well-being. The evidence suggests that stock returns affect the well-being of not only investors but also noninvestors. Specifically, a contemporaneous negative (positive) relationship between daily stock market returns and violent crime rates is found for investors (noninvestors). A similar relationship is also found between local earnings surprises and violent crime. The contrasting relationships for investors and noninvestors suggests that relative wealth may influence well-being.
- Subjects
UNITED States; STOCK exchanges; RATE of return on stocks; PSYCHOLOGICAL well-being; CRIME; INVESTMENTS; INVESTORS; CORPORATE profits
- Publication
Review of Financial Studies, 2024, Vol 37, Issue 7, p2273
- ISSN
0893-9454
- Publication type
Article
- DOI
10.1093/rfs/hhad090