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Cold time, cool time? Weather-induced moods and financial risk tolerance: Evidence from a real-world banking context

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  • Broihanne, Marie-Hélène
  • Orkut, Hava
  • Osei-Tutu, Francis
Abstract
Recent studies in household finance document that weather-induced moods influence financial behaviours. Using a large database from a real-world banking context, we examine the influence of weather-induced moods on the self-assessed financial risk tolerance of more than 60,000 retail clients based on a risk-profiling questionnaire during their visit at a bank. We find that risk tolerance is lower during periods of unpleasant weather. These findings are robust in retail clients who answered the questionnaire twice but under different weather conditions.

Suggested Citation

  • Broihanne, Marie-Hélène & Orkut, Hava & Osei-Tutu, Francis, 2023. "Cold time, cool time? Weather-induced moods and financial risk tolerance: Evidence from a real-world banking context," Finance Research Letters, Elsevier, vol. 55(PB).
    • Handle: RePEc:eee:finlet:v:55:y:2023:i:pb:s1544612323003501
    DOI: 10.1016/j.frl.2023.103978
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    References listed on IDEAS

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    1. William N. Goetzmann & Dasol Kim & Alok Kumar & Qin Wang, 2015. "Weather-Induced Mood, Institutional Investors, and Stock Returns," The Review of Financial Studies, Society for Financial Studies, vol. 28(1), pages 73-111.
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    9. Shafi, Kourosh & Mohammadi, Ali, 2020. "Too gloomy to invest: Weather-induced mood and crowdfunding," Journal of Corporate Finance, Elsevier, vol. 65(C).
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    More about this item

    Keywords

    Financial risk tolerance; Weather; Mood; MIFID questionnaires;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • G50 - Financial Economics - - Household Finance - - - General

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