Who cares about stock market booms and busts? Evidence from data on mental health

ratcliffe, anita; taylor, karl;

This article investigates the association between stock market activity and mental well-being, exploiting the availability of interview dates in the British Household Panel Survey to match changes in the FTSE 100 stock price index to respondents over the period 1991�2008. We present evidence that annual changes in the price index are associated with better mental well-being whilst greater uncertainty,
proxied by volatility in the price index, is associated with poorer mental wellbeing even after controlling for macroeconomic conditions. Our findings provide support of a wealth mechanism and also suggest that the stock market is a barometer of economic prospects and/or social movements and mood.