Abstract
AbstractIn this study, we extend the standard economic model of suicide by considering a new influential factor driving the voluntary death rate. Using an international sample, we estimate the model and document a robust and significant inverse relation between stock market returns and the percentage increase in suicide rates. Trends in male and female suicide are affected by market fluctuations, both contemporaneously and at a lag. This predictive quality of stock returns offers the potential to implement pro‐active suicide prevention strategies for those who could be affected by the vagaries of the market and general economic downturns.
Highlights
Except for Homo sapiens, no conclusive evidence for suicidal behavior has been observed elsewhere in the animal kingdom (Preti 2011)
We develop a theoretical model that traces the relation between national suicide rates and stock market movements
We find that contemporaneous returns and their previous values drive the changes in suicide rates for the general population
Summary
Except for Homo sapiens, no conclusive evidence for suicidal behavior has been observed elsewhere in the animal kingdom (Preti 2011). If sudden changes in stock prices signal future financial hardship, careful monitoring of market conditions could help policy makers design and implement proactive strategies to manage potential suicide epidemics. We find that contemporaneous returns and their previous values drive the changes in suicide rates for the general population. This finding persists when the data are broken down by gender. Increases in female labor market participation and prior health expenditure stave off growth in male suicide rates Women decrease their proclivity to commit suicide whenever they have a greater tendency to bear children and when the consumption of alcohol in the general population falls. Analysis at the macroeconomic level has its own utility, as it is required to inform policy direction reliably
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