Rethinking worrying about the stock market, but instead, anxious about employment

• Published date: 01 July 2023
• Author: Mingda Li,William V. Rapp,Yi Chen
• Date: 01 July 2023
• DOI: http://doi.org/10.1002/jcaf.22616

Received:  November Accepted:  December 

DOI: ./jcaf.

RESEARCH ARTICLE

Rethinking worrying about the stock market, but instead,

anxious about employment

Mingda Li1William V. Rapp2Yi Chen3

Pinterest, Newark, New Jersey, USA

Center for Bubble Research Inc.,

Scarborough, New York,USA

Martin Tuchman School of Management,

NJIT, University Heights, Newark, New

Jersey, USA

Correspondence

William V.Rapp, Center for Bubble

Research Inc.,  River Road,

Scarborough, NY , USA.

Email: wvr@nyu.edu

Funding information

National Institutes of Health,

Grant/AwardNumber: ULTR

Abstract

Using Engleberg’s and Parsons’s () study (E&P) relating stock prices and

hospital admissions for NJ, mental disease admits appear affected. One devi-

ation decrease in returns of NJ/NYC-based companies increases average daily

mental disorder admits by month by .% above the expected level. However,the

study raises issues concerning E&P’sstate-based stock price verses hospital admit

conclusions by examining NJ counties’ unemployment rates compared to stock

market effects on hospital admissions. Stock market effects are weak in rural

and low-income counties unless near NYC. Further, employment is a stronger

explanation than stock prices and even their combination for all counties. A

one percent decrease in monthly employment rate increases admits above the

expected level by .% across all counties. Stock prices thus seem an employment

or economic proxy for NJ, rather than an independent variable.

KEYWORDS

employment, hospital admissions, stock prices

1 INTRODUCTION

The results presented in this paper and in Engleberg and

Parsons’ () are part of a large, growing and wide-

ranging literature relating economic events and conditions

with individual behavior and social conditions, often with

important policy implications. Studies involving health-

care, human well-being, the economy, the environment

and stock markets are important parts of this literatureand

its related research.

For example, Christopher Ruhm () did an analysis

of microdata indicating that smoking and obesity increase

when the economy strengthens, whereas physical activ-

ity is reduced, and diet becomes less healthy. There are

also studies relating sporting match results to investments

in stocks with Edmans et al. () finding a significant

market decline after soccer losses.

Environmental conditions and the weather have also

been found to affect the stock market. Hirshleifer and

Shumway () examined the relationship between

morning sunshine in the city of a country’s leading stock

exchange and the daily market index returns across 

countries from  to . There are also studies that

have examined the economic impact of air pollution. Levy

and Yagil (), for example, examined the relationship

between air pollution and stock returns using data from

the Air Quality Index, and stock returns from four stock

exchanges in the United States. Further, Cotti et al. ()

found that large, negative monthly DJI (Dow Jones Index)

returns, decreases in the DJI, and stock market crashes are

widely associated with a worsening in self-reported mental

health along with more cigarette smoking, binge drinking,

and fatal car accidents involving alcohol.

Health is a particularly important topic because poten-

tial adverse health effects caused by adverse economic

events affect a country’s well-being and have costs that go

beyond the immediate effects on GDP. Charles and DeCi-

cca () have found evidence of procyclical relationships

J Corp Account Finance. ;:–. ©  Wiley Periodicals LLC.109wileyonlinelibrary.com/journal/jcaf