2024/04/19 by Despina Gavresi, Anastasia Litina, Αναστασία Λίτινα +2 · 1 citation
Business, Management and Accounting · Decision Sciences · Economics, Econometrics and Finance · #Decision-Making and Behavioral Economics #Financial Literacy, Pension, Retirement Analysis #Financial Markets and Investment Strategies
paper · pdf · doi:10.1111/kykl.12382
crossref issued 2024/04/19 · crossref published 2024/04/19 · crossref published-online 2024/04/19 · openalex publication_date 2024/04/19 · crossref created 2024/04/19 · crossref deposited 2024/07/02 · crossref published-print 2024/08/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/29 · crossref indexed 2026/07/29
Abstract The fact that environmental factors have a broader effect on financial decision‐making has been lengthily explored, but there is a gap in understanding how personality traits might mediate the effects of temperature on individual decision‐making. Using plausibly exogenous variation of individuals' exposure to changes in national temperature between 2004 and 2018 across NUTS 1 regions in 29 European countries, we estimate the causal effect of a marginal change in temperature on financial investments and its interaction with the trait of optimism/pessimism using Survey of Health, Ageing and Retirement in Europe (SHARE) data. A 10% increase in temperature is associated with a 0.03 percentage point (pp) rise in the probability that an optimist invests in bonds and a 0.024 pp decline in the probability for investment in stocks. However, among pessimists, we find null effects. The results are comparable on the intensive margin. In sum, our results highlight the potentially heterogeneous ways that environmental factors shape individual decision‐making.