Abstract
Do happy people predict future risk and return differently from unhappy people, or do individuals rely only on economic facts? We survey investors on their subjective sentiment-creating factors, return and risk expectations, and investment plans. We find that noneconomic factors systematically affect return and risk expectations, where the return effect is more profound. Investment plans are also affected by noneconomic factors. Sports results and general feelings significantly affect predictions. Sufferers from seasonal affective disorder have lower return expectations in the autumn than in other seasons, supporting the winter blues hypothesis.
| Original language | English |
|---|---|
| Pages (from-to) | 145-168 |
| Number of pages | 24 |
| Journal | Journal of Financial and Quantitative Analysis |
| Volume | 50 |
| Issue number | 1-2 |
| DOIs | |
| State | Published - 1 Apr 2015 |
Bibliographical note
Publisher Copyright:© Michael G. Foster School of Business, University of Washington 2014.
Funding
The Longitudinal Internet Studies for the Social Sciences (LISS) panel data were collected by CentERdata (Tilburg University, The Netherlands) through its Measurement and Experimentation in the Social Sciences (MESS) project funded by the Netherlands Organization for Scientific Research (NWO). This paper benefits from the helpful comments of Jo Danbolt, Marcel Das, Ming Dong, Chris Florackis, Richard Harris, Alexandros Kostakis, Luis Muga, Antonios Siganos, George Skiadopoulos, Patrick Verwijmeren, and participants at the Conference of the 2012 European Financial Management Association in Barcelona, the 2012 MESS workshop in Amsterdam, the 2012 Northern Finance Conference in Niagara Falls, and seminars at the University of Exeter, University of Glasgow, University of Liverpool, and University of Piraeus. Special thanks go to Henk Berkman (the referee) and to Stephen Brown (the editor) for helpful comments. Finally, we thank Marije Oudejans for her help with the panel data and Micaela Maftei for editorial assistance. We gratefully acknowledge additional financial support from La Chaire Dauphine–ENSAE–Groupama “Les Particulier Face au Risque” of the Fondation du Risque and L’Agence Nationale de la Recherche in the context of the project ANR Risk. Veld also acknowledges financial support from the Carnegie Trust for Universities of Scotland. Levy acknowledges financial support from the Krueger Center of Finance. 18 07 2014 04 2015 50 1-2 145 168 Copyright © Michael G. Foster School of Business, University of Washington 2014 2014 Michael G. Foster School of Business, University of Washington
| Funders | Funder number |
|---|---|
| Fondation du Risque | |
| Krueger Center of Finance | |
| Netherlands Organization for Scientific Research | |
| Carnegie Trust for the Universities of Scotland | |
| Agence Nationale de la Recherche | |
| Nederlandse Organisatie voor Wetenschappelijk Onderzoek | |
| Universiteit van Tilburg |