Stock Market Returns and Suicide Rates: Evidence From the United States

Abstract

I investigated whether or not social mood is associated with the financial decisions of market participants in the United States, using the monthly suicide rate to represent the degree of negative social mood in a society. From monthly suicide data collected over the period from January 1981 through to December 2012, I found that suicide rates are associated with stock market returns, in aggregate. Specifically, suicide rates predicted future stock market returns, showing contemporaneous and lagged relationships with U.S. stock market returns. Furthermore, small-cap stocks were found to be more likely to be affected by suicide rates than were large-cap stocks. Female suicide rates had a stronger effect on market returns than male suicide rates did, suggesting that this suicide effect is not induced by economic reasons but, rather, is related to emotional factors (e.g., investor mood).