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The Dow is Killing Me: Risky Health Behaviors and the Stock Market
Author(s) -
Cotti Chad,
Dunn Richard A.,
Tefft Nathan
Publication year - 2015
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.3062
Subject(s) - stock market , economics , stock (firearms) , binge drinking , unemployment , proxy (statistics) , stock market index , econometrics , financial economics , actuarial science , poison control , suicide prevention , environmental health , medicine , macroeconomics , engineering , mechanical engineering , paleontology , horse , machine learning , computer science , biology
We investigate how risky health behaviors and self‐reported health vary with the Dow Jones Industrial Average (DJIA) and during stock market crashes. Because stock market indices are leading indicators of economic performance, this research contributes to our understanding of the macroeconomic determinants of health. Existing studies typically rely on the unemployment rate to proxy for economic performance, but this measure captures only one of many channels through which the economic environment may influence individual health decisions. We find that large, negative monthly DJIA returns, decreases in the level of the DJIA, and stock market crashes are widely associated with worsening self‐reported mental health and more cigarette smoking, binge drinking, and fatal car accidents involving alcohol. These results are consistent with predictions from rational addiction models and have implications for research on the association between consumption and stock prices. Copyright © 2014 John Wiley & Sons, Ltd.