TY - JOUR
T1 - Rain or shine
T2 - Happiness and risk-taking
AU - Guven, Cahit
AU - Hoxha, Indrit
N1 - Publisher Copyright:
© 2014 The Board of Trustees of the University of Illinois.
PY - 2015/8/1
Y1 - 2015/8/1
N2 - 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.
AB - 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.
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U2 - 10.1016/j.qref.2014.10.004
DO - 10.1016/j.qref.2014.10.004
M3 - Article
AN - SCOPUS:84937847359
SN - 1062-9769
VL - 57
SP - 1
EP - 10
JO - Quarterly Review of Economics and Finance
JF - Quarterly Review of Economics and Finance
ER -