That the trend of the stock market affect the lives of all of us, in a more or less direct, it is a fact. You know for a long time the relationship between fluctuations in stock market and health of the people, but was not so obvious to find a direct link between the profitability of the Stock exchange and the accidents of the road.
To demonstrate it, and measure the effects, were Corrado Giulietti, a professor of economics at the university of Southampton Mirco Tonin, an economist at the University of bozen / Bolzano, with research interests in public economics, experimental and behavioural, and Michael Vlassopoulos, also he is a professor of economics at the university of Southampton.
Their work has been published in 2018 and is titled “When the market drives you crazy: the Stock market returns and fatal car accidents”.
In the introduction they write that the stock market affects some of the most important decisions of the financial investors, such as the consumption, the saving and labor supply through the channel of financial wealth.
Of their paper, they argue, provides evidence that the fluctuations daily in the stock market have important effects, and neglected in another environment, not related, that is to say, the driving of the cars.
By collecting the available data on road fatalities that have occurred in the United States from 1990 to 2015, using the database FARS (Fatality Analysis Reporting System) and crossing them with financial indices such as the Standard & Poors 500, the three economists have established as the “reduction of a standard deviation in daily returns of the stock market is associated with an increase in the number of fatal accidents”. An average value estimated in 0.5% in the most; that is to say that in the two days following a decline in Wall Street’s victims rise in the daily average from 37 to 38.
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They have also conducted a series of tests the so-called “forgery” to support the causal interpretation of this result. “Our results – they add – are consistent with the emotions immediately aroused by a negative performance of the stock market in influencing the number of fatal accidents, particularly among the inexperienced investors”.
Being able to rely on other information related to the type of car involved, and then to his value, to the age of drivers and geographical references, it was also possible to demonstrate how this effect influence is greater among investors less experienced in financial matters.