Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/185380 
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 7182
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The stock market influences some of the most fundamental economic decisions of investors, such as consumption, saving, and labor supply, through the financial wealth channel. This pa-per provides evidence that daily fluctuations in the stock market have important - and hitherto neglected - spillover effects in another, unrelated domain, namely driving. Using the universe of fatal road car accidents in the United States from 1990 to 2015, we find that a one standard de- viation reduction in daily stock market returns is associated with a 0.5% increase in the number of fatal accidents. A battery of falsification tests support a causal interpretation of this finding. Our results are consistent with immediate emotions stirred by a negative stock market perfor-mance influencing the number of fatal accidents, in particular among inexperienced investors, thus highlighting the broader economic and social consequences of stock market fluctuations.
Subjects: 
stock market
car accidents
emotions
JEL: 
D91
R41
G41
Document Type: 
Working Paper
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