Deakin University
Browse

File(s) under permanent embargo

Rain or shine: happiness and risk-taking

journal contribution
posted on 2014-01-01, 00:00 authored by Cahit Guven, I H Hoxha
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.

History

Journal

Quarterly review of economics and finance

Pagination

1 - 10

Publisher

Elsevier

Location

Amsterdam, The Netherlands

ISSN

1878-4259

Language

eng

Publication classification

C Journal article; C1 Refereed article in a scholarly journal

Copyright notice

2014, Elsevier

Usage metrics

    Research Publications

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC