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The Dow is Killing Me: Risky Health Behaviors and the Stock Market
Chad Cotti1,2, Richard A Dunn3, Nathan Tefft4
1Department of Agricultural and Resource Economics, College of Agriculture and Natural Resources, University of Connecticut, Storrs, CT, USA.
Health Economics
|May 8, 2014
Summary
Stock market downturns, including crashes, are linked to poorer self-reported mental health and increased risky behaviors like smoking and binge drinking. Economic performance significantly impacts public health decisions.
Area of Science:
- Health Economics
- Behavioral Economics
- Public Health
Background:
- Economic performance is a known determinant of health.
- Existing research often uses unemployment rates to measure economic impact on health.
- The Dow Jones Industrial Average (DJIA) offers a broader economic indicator.
Purpose of the Study:
- To investigate the relationship between stock market performance and health behaviors.
- To explore how economic indicators like the DJIA influence self-reported health and risky behaviors.
- To understand macroeconomic determinants of health beyond unemployment.
Main Methods:
- Analysis of health behaviors and self-reported health data against DJIA performance.
- Examination of data during periods of stock market crashes.
- Utilizing DJIA returns and levels as economic performance proxies.
Main Results:
- Significant negative monthly DJIA returns and stock market crashes correlate with worsened self-reported mental health.
- Increased instances of cigarette smoking and binge drinking observed during economic downturns.
- Higher rates of alcohol-related fatal car accidents associated with stock market declines.
Conclusions:
- Stock market performance is a significant macroeconomic determinant of individual health behaviors.
- Economic downturns can lead to increased engagement in risky health behaviors.
- Findings support rational addiction models and highlight the link between financial markets and public health.
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