A lifecycle perspective of stock market performance and wellbeing

Frijters, Paul, Johnston, David W, Shields, Michael A and Sinha, Kompal (2015) A lifecycle perspective of stock market performance and wellbeing. Journal of Economic Behavior and Organization, 112 237-250. doi:10.1016/j.jebo.2015.02.004

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Author Frijters, Paul
Johnston, David W
Shields, Michael A
Sinha, Kompal
Title A lifecycle perspective of stock market performance and wellbeing
Journal name Journal of Economic Behavior and Organization   Check publisher's open access policy
ISSN 0167-2681
Publication date 2015-04
Year available 2015
Sub-type Article (original research)
DOI 10.1016/j.jebo.2015.02.004
Open Access Status
Volume 112
Start page 237
End page 250
Total pages 14
Place of publication Netherlands
Publisher Elsevier BV
Collection year 2016
Language eng
Abstract We estimate the effect of stock market fluctuations on subjective wellbeing and mental health using Australian survey data over the period 2001–2012, which includes the global financial crisis. A particular innovation of the paper is the use of three satisfaction measures – overall, financial, employment – and the use of a stylised lifecycle investment model. These features, coupled with a robust identification strategy based on comparing survey respondents interviewed in the same quarter and location, allow us to better understand individual reactions to stock market changes. We find that stock market increases lead to a significant but modest improvements in life satisfaction and mental health. This effect is driven by young and middle-aged males, and is stronger for those with direct exposure to the stock market. For young cohorts, the stock market index acts as a leading indicator of employment prospects, whilst for older cohorts it acts directly on financial satisfaction.
Keyword Stock market
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2016 Collection
School of Economics Publications
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