Do stock prices drive people crazy?
Chung-Liang Lin1, Chin-Shyan Chen2, Tsai-Ching Liu1
1Department of Economics, National Dong Hwa University, 1, Sec. 2, Da Hsueh Rd, Shoufeng, Hualien 97401, Taiwan Department of Economics, National Taipei University, 151, University Rd, San Shia, New Taipei City 23741, Taiwan Department of Public Finance, National Taipei University, 151, University Rd, San Shia, New Taipei City 23741, Taiwan.
Health Policy and Planning
|February 15, 2014
Summary
Stock market volatility significantly impacts mental health. Declines in the Taiwan Stock Exchange Capitalization Weighted Stock Index correlate with increased mental disorder hospitalizations, suggesting financial stress affects psychological well-being.
Area of Science:
- Psychiatry
- Behavioral Economics
- Financial Psychology
Background:
- Mental disorders represent a significant public health concern.
- Stock market fluctuations can induce financial stress, potentially impacting mental health.
- Previous research has not extensively explored the direct link between stock market volatility and mental disorder incidence.
Purpose of the Study:
- To investigate the relationship between stock market volatility and daily hospitalizations for mental disorders.
- To quantify the impact of stock price changes on mental health service utilization.
Main Methods:
- Utilized time-series analysis of daily mental disorder hospitalizations in Taiwan from 1998-2009.
- Correlated hospitalization data with daily stock price movements of the Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX).
Main Results:
- A 1000-point fall in the TAIEX was associated with a 4.71% increase in daily mental disorder hospitalizations.
- A 1% daily fall in the TAIEX correlated with a 0.36% rise in hospitalizations.
- Consecutive daily stock price falls also showed a significant association with increased hospitalizations.
Conclusions:
- Stock market volatility is a significant factor influencing mental disorder hospitalizations.
- Financial market instability may exacerbate mental health issues across various demographics.
- Findings highlight the need to consider socioeconomic factors in mental healthcare planning.
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