Mood-induced variation in risk preferences

Doron Kliger, Ori Levy

Research output: Contribution to journalArticlepeer-review


Psychological research links good (bad) mood with increased (decreased) risk aversion. This relation has been widely documented in experimental setups. There has not been, however, a complementary analysis with real-life decisions data. This paper fills this gap by testing the relation between mood and risk attitude in capital markets. To shed light on that relation, we recover risk preferences from capital market data and employ accumulated evidence suggesting that people's mood is correlated with weather conditions. Corroborating established experimental evidence, we find that good (bad) mood is associated with investors being less (more) willing to tolerate risk.

Original languageEnglish
Pages (from-to)573-584
Number of pages12
JournalJournal of Economic Behavior and Organization
Issue number4
StatePublished - 1 Dec 2003


  • Mood
  • Risk preferences
  • Weather

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management


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