The sunnier the weather, the sunnier the human spirit. And the happier people are, the less likely they are to take risky investment decisions, a Deakin University researcher has found. Using data from Germany and the Netherlands, Dr Cahit Guven, an expert in behavioural economics and wellbeing, examined the connection between the weather, people’s self-reported wellbeing and their economic choices. “Economists are interested in the decisions people make about the way they allocate their investments across various portfolios and how this matches with the behaviour. Most of the choices we make in daily life are related to risk-taking, be it investment, consumption, saving, moving, smoking or driving.” Guven said past research had noted the relationship between morning sunshine and the performance of markets on the stock exchange. Other researchers have demonstrated a link between depression experienced by sufferers of seasonal affective disorder with seasonal variations in stock returns. Guven’s research linked the data on wellbeing with weather data, identifying increases in regional sunshine with increased happiness. “Happy people expected to have a longer life and were more concerned about the future than about the present,” he said. “Interestingly they also expect less inflation. Our research showed that happy people were more likely to have life insurance, savings accounts and operating assets but were less likely to invest in shares as they found them too risky,” he said. “This may be due to the fact that happy people like to take time to make decisions and have more self-control. Happy people also
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