Does mood affect trading behavior?

We test whether investor mood affects trading with data on all stock market transactions in Finland, utilizing variation in daylight and local weather. We find some evidence that environmental mood variables (local weath
We test whether investor mood affects trading with data on all stock market transactions in Finland, utilizing variation in daylight and local weather. We find some evidence that environmental mood variables (local weather, length of day, daylight saving and lunar phase) affect investors’ direction of trade and volume. The effect magnitudes are roughly comparable to those of classical seasonals, such as the Monday effect. The statistical significance of the mood variables is weak in many cases, however. Only very little of the day-to-day variation in trading is collectively explained by all mood variables and calendar effects, but lower frequency variation seems connected to holiday seasons. 
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Metadaten
Author:Markku Kaustia, Elias Rantapuska
URN:urn:nbn:de:hebis:30:3-293731
URL:http://ssrn.com/abstract=2209665
DOI:http://dx.doi.org/10.2139/ssrn.2209665
Parent Title (German):SAFE working paper series ; No. 4
Series (Serial Number):SAFE working paper series (4)
Publisher:Goethe-Univ., House of Finance, Sustainable Architecture for Finance in Europe, SAFE
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2013
Date of first Publication:2012/11/09
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2013/04/17
Tag:mood; seasonal affective disorder (SAD); stock market; trading behavior; weather
Issue:Version 9 November 2012
Pagenumber:53
HeBIS PPN:337747679
Institutes:Wirtschaftswissenschaften
House of Finance (HoF)
Center for Financial Studies (CFS)
Dewey Decimal Classification:330 Wirtschaft
JEL-Classification:D03 Behavioral Economics; Underlying Principles (Updated!)
G11 Portfolio Choice; Investment Decisions
G12 Asset Pricing; Trading volume; Bond Interest Rates
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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