When the market drives you crazy: Stock market returns and fatal car accidents

Corrado Giulietti; Mirco Tonin; Michael Vlassopoulos

doi:10.1016/j.jhealeco.2019.102245

When the market drives you crazy: Stock market returns and fatal car accidents

J Health Econ. 2020 Mar:70:102245. doi: 10.1016/j.jhealeco.2019.102245. Epub 2020 Jan 20.

Authors

Corrado Giulietti¹, Mirco Tonin², Michael Vlassopoulos³

Affiliations

¹ University of Southampton, Southampton, United Kingdom; Centre for Population Change, Southampton, United Kingdom; Global Labor Organization. Electronic address: [email protected].
² Free University of Bozen-Bolzano, Bolzano, Italy; CESifo, Munich, Germany; Dondena Centre for Research on Social Dynamics and Public Policy, Bocconi University, Milan, Italy; IZA, Bonn, Germany. Electronic address: [email protected].
³ University of Southampton, Southampton, United Kingdom; IZA, Bonn, Germany. Electronic address: [email protected].

PMID: 32006856
DOI: 10.1016/j.jhealeco.2019.102245

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.

Keywords: Car accidents; Emotions; Stock market.

Publication types

Research Support, Non-U.S. Gov't

MeSH terms

Accidents, Traffic / mortality*
Databases, Factual
Investments*
United States / epidemiology