Good Day Sunshine: Stock Returns and the Weather
Top Cited Papers
- 6 May 2003
- journal article
- research article
- Published by Wiley in The Journal of Finance
- Vol. 58 (3) , 1009-1032
- https://doi.org/10.1111/1540-6261.00556
Abstract
Psychological evidence and casual intuition predict that sunny weather is associated with upbeat mood. This paper examines the relationship between morning sunshine in the city of a country's leading stock exchange and daily market index returns across 26 countries from 1982 to 1997. Sunshine is strongly significantly correlated with stock returns. After controlling for sunshine, rain and snow are unrelated to returns. Substantial use of weather‐based strategies was optimal for a trader with very low transactions costs. However, because these strategies involve frequent trades, fairly modest costs eliminate the gains. These findings are difficult to reconcile with fully rational price setting.Keywords
All Related Versions
This publication has 39 references indexed in Scilit:
- Market Efficiency, Bounded Rationality, and Supplemental Business Reporting DisclosuresJournal of Accounting Research, 2001
- Contagious Speculation and a Cure for Cancer: A Nonevent that Made Stock Prices SoarThe Journal of Finance, 2001
- Measuring Bubble Expectations and Investor ConfidenceJournal of Psychology and Financial Markets, 2000
- Investor Reaction to Salient News in Closed‐End Country FundsThe Journal of Finance, 1998
- Out of Control: Visceral Influences on BehaviorOrganizational Behavior and Human Decision Processes, 1996
- Mood and Stereotyping: Affective States and the Use of General Knowledge StructuresEuropean Review of Social Psychology, 1996
- The effects of mood state on judgemental accuracy: Processing strategy as a mechanismCognition and Emotion, 1995
- Mood effects on subjective probability assessmentOrganizational Behavior and Human Decision Processes, 1992
- The role of potential loss in the influence of affect on risk-taking behaviorOrganizational Behavior and Human Decision Processes, 1988
- Can computers feel? theory and design of an emotional systemCognition and Emotion, 1987