Rain or shine: happiness and risk-taking

Guven, Cahit and Hoxha, Indrit Hoxha 2014, Rain or shine: happiness and risk-taking, Quarterly review of economics and finance, vol. 57, pp. 1-10, doi: 10.1016/j.qref.2014.10.004.

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Title Rain or shine: happiness and risk-taking
Author(s) Guven, CahitORCID iD for Guven, Cahit orcid.org/0000-0001-8346-772X
Hoxha, Indrit Hoxha
Journal name Quarterly review of economics and finance
Volume number 57
Start page 1
End page 10
Total pages 10
Publisher Elsevier
Place of publication Amsterdam, The Netherlands
Publication date 2014
ISSN 1878-4259
Summary In this paper, we focus on the effects of weather, such as sunshine, as an exogenous shifter of happiness using happiness data at the individual level, and estimate sunshine as a predictor of happiness. Then we relate the predicted happiness to risk-taking. By doing so, we estimate a relationship, stronger than a simple correlation, between happiness and risky behavior. Weather changes, and sunshine in particular, have substantial influences on personal happiness. However, unexpected weather changes appear to be more important than expected changes for happiness. We include several risk measures such as subjective risk-taking and financial assets in our analysis. Happier people appear to be more risk-averse in general and more specifically in financial decisions, and choose accordingly safer investments. This might be explained by the fact that happy people take more time for making decisions and have more self-control. In addition, predicted happiness affects expectations about longevity and inflation. Happy people expect to live longer and accordingly seem more concerned about the future than the present, and expect less inflation.
Language eng
DOI 10.1016/j.qref.2014.10.004
Field of Research 140207 Financial Economics
Socio Economic Objective 910209 Preference, Behaviour and Welfare
HERDC Research category C1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2014, Elsevier
Persistent URL http://hdl.handle.net/10536/DRO/DU:30071713

Document type: Journal Article
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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