The Disutility of Stock Market Losses: Evidence From Domestic Violence

Journal
The Review of Financial Studies
ISSN
1465-7368
Type
journal article
Date Issued
2025-04-29
Author(s)
Lin, Tse-Chun
;
DOI
Abstract
Stock returns during the week are negatively associated with the reported incidence of domestic violence during the weekend. This relationship is primarily driven by negative returns. The incidence of domestic violence increases with the magnitude of losses, and the effect increases with local stock market participation. Our findings suggest that negative wealth shocks caused by stock market crashes can affect stress levels within intimate relationships, escalate arguments, and trigger domestic violence. Stock market losses may reduce household utility beyond the shock to financial wealth, supporting gain-loss models where disutility from losses outweighs the utility from gains of a similar magnitude.
Language
English
Refereed
yes
Publisher
Oxford University Press (OUP)
Volume
36
Number
4
URL