When the market drives you crazy

That is the title of the paper, by Corrado Giuletti, Mirco Tonin, and Michael Vlassopoulos, the subtitle is “Stock market returns and fatal car accidents,” here is the abstract:

This paper provides evidence that daily fluctuations in the stock market have important–and hitherto neglected–spillover effects on fatal car accidents. Using the universe of fatal car accidents in the United States from 1990 to 2015, we find that a one standard deviation reduction in daily stock market returns is associated with a 0.6% increase in fatal car accidents that happen after the stock market opening. A battery of falsification tests support a causal interpretation of this finding. Our results are consistent with immediate emotions stirred by a negative stock market performance influencing the number of fatal accidents, in particular among inexperienced investors.

Forthcoming in Journal of Health Economics, via the excellent Kevin Lewis.

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I suppose the usual "correlation is not causation" applies. Next I guess we will be told we know why the phrase " Stock market "Crash" " is used.

Well, even assuming causation, it's not clear why they should conclude that causation it's tied to the stock market drop, instead of to the outside events that are themselves causing the stock market drop.

In other words, why shouldn't we conclude that both the car accident statistics and the stuck market results are caused by the same thing, instead of treating them as a cascading chain of events?

In particular, I suspect that any negative event involving air travel (9/11, an attempted terror bombing, plane crash, disease outbreak) would both negatively impact the stock market and increase vehicle miles driven.

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This may be the most meaningless and stupid perversion of statistics I have ever seen.

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Read this and then make the case that those who play the market don't deserve to be dead: https://www.nytimes.com/2020/01/23/business/cum-ex.html

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The "paper" is useless fiction.

"Apophenia" is the tendency to mistakenly perceive connections and meaning between unrelated things.
It is a somewhat common human psychological propensity to seek & see patterns in random information that has no objective patterns.

Economic incentives to 'Publish or Perish' seem to stimulate Apophenia among academics.

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Post chess-tournament cognitive capacity depletion- From 1968 through 1972 I was in various car pools that drove at least several hours to get to tournaments in large cities. It was generally agreed that driving performances were much impaired on the return trips home. Chess requires a very high level of vigilance for many hours across several days against making blunders and other less than perfect moves. It might be amusing to compare vigilance test scores before and after chess tournaments with similar tests given to ordinary drivers before and after long car drives. (Hashtag: Anecdotal.)

An interesting suggestion for Tesla perhaps. Have the car challenge you to a chess match, if your performance is below par, the car drives itself to the destination.

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--among inexperienced investors or among inexperienced drivers? (and/or the categories' overlap)

Do the recent data account for the introduction of wireless telephony that is said to have enhanced driving performance across recent decades?

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The word battery suggests to me that the point the authors is making is exactly about causation not being proven by tests.

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The aggressive, threatening behavior of so many drivers means that more highway fatalities are needed. The problem is how to protect the well-behaved and polite innocents from these self-absorbed psychopaths.

Defensive driving.

Drive the biggest, heaviest truck (try a Ram 2500) you can. Don't speed and don't tailgate. Assume someone will cut in front of you driving 40 mph faster than you, while texting.

Casein point. Yesterday I watched an old, arthritic man slowly, painfully climbing into a huge pick up.

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If it's too stupid to believe and the "proof" is statistical, don't believe it.

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Paper is behind paywall but wondering if they control for seasonality?Traffic accidents are highest in late summer and fall which also are the weakest months for equity returns historically - presumably for different reasons.

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Social science is about creating social problems.

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How did they know that the guilty drivers owned stocks that went down?

Maybe the guilty drivers were hurrying to the nearest computer terminal to buy the dips.

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I believe it. There is similar research by Engelberg and Parsons, J Finance, 2016, showing that hospital admissions rise sharply and immediately (and do not reverse, in other words, this does not just speed up problems that would have occurred a bit later) when the stock market falls. The data is the universe of California hospital admission data for more than 30 years. The rise in admissions was especially strong in periods of otherwise low volatility.

I don't believe it for a second. It's noise mining.

1) One standard deviation from average daily return (about 1% change in the market) isn't generating many margin calls.

2) The number of people who hold significant relevant positions in the market is so small that it would be impossible for them to have an impact on national fatality data.

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It makes you frustrated and make do more mistake that makes you more frustrated and you end up making losses and losses. Its not easy to make money from share market. You have trust only on yourselves. At the end of the day its your money, your loss and your profit

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It makes you frustrated and make do more mistake that makes you more frustrated and you end up making losses and losses. Its not easy to make money from share market. You have trust only on yourselves. At the end of the day its your money, your loss and your profit
https://trueway-blog.com/how-to-make-money-from-share-market/

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