![]() Helping ease the seasonal weather transitions for patients, light mimicking lamps, bulbs, and even headsets can quite literally brighten up one’s day. Though there is still much to learn about this seasonal condition, proven treatments in the form of light therapies exist. The shorter hours of daylight in the wintertime on top of cloudy skies and low temperatures can hit us harder than we realize, disrupting our circadian rhythms, energy levels, and even our moods. Hard evidence of exacts causes are still yet unknown, but doctors and scientists believe it may be related to the way light affects us. Though similar in symptoms, the differences between Seasonal Affective Disorder and traditional depression are subtle, yet vitally important to understanding how to approach its treatment.Ī mysterious and often misunderstood condition, SAD (Seasonal Affective Disorder) seems to result from both mental and physical stress, particularly around the winter time. Please address questions regarding content to Mark Kamstra, Research Department, Federal Reserve Bank of Atlanta, 1000 Peachtree Street, N.E., Atlanta Georgia 30309, 40, 40 (fax), Lisa Kramer, Rotman School of Management, University of Toronto, 105 St.Affecting millions of adults and children alike, one in five Americans has been diagnosed with seasonal depression. Any remaining errors are the authors’ responsibility. The views expressed here are the authors’ and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. The authors gratefully acknowledge financial support of the Social Sciences and Humanities Research Council of Canada and the research assistance of Andy Bunkanwanicha and Yang Wu. The authors have benefited from the suggestions of Ben Bernanke, Stanley Coren, Rick Green, Steven Jones, Andrew Karolyi, George Kramer, Tim Loughran, Raj Mehra, Jacob Sagi, Bob Shiller, Dick Thaler, participants at the meetings of the American Finance Association, the Canadian Econometrics Study Group, the Canadian Economics Association, the Scottish Institute for Research in Investment and Finance, and seminar participants at the following universities: Guelph, Manchester/UMIST, McMaster, Montreal, Notre Dame, San Francisco, Toronto, Wilfrid Laurier, and York. Published in the American Economic Review, March 2003 Key words: stock returns, seasonality, behavioral finance, seasonal affective disorder, SAD, depression Overall, the economic magnitude of the SAD effect is large. ![]() Patterns at different latitudes and in both hemispheres provide compelling evidence of a link between seasonal depression and seasonal variation in stock returns: Higher latitude markets show more pronounced SAD effects and results in the Southern Hemisphere are six months out of phase, as are the seasons. Using data from numerous stock exchanges and controlling for well-known market seasonals as well as other environmental factors, stock returns are shown to be significantly related to the amount of daylight through the fall and winter. Building on these links between the length of day, depression, and risk aversion, we provide international evidence that stock market returns vary seasonally with the length of the day, a result we call the SAD effect. Experimental research in psychology and economics indicates that depression, in turn, causes heightened risk aversion. SAD is an extensively documented medical condition whereby the shortness of the days in fall and winter leads to depression for many people. This paper investigates the role of seasonal affective disorder (SAD) in the seasonal time-variation of stock market returns. Mark Kamstra, Lisa Kramer, and Maurice Leviĭownload the full text of this paper in PDF format - (692 KB) Southeastern Rental Affordability Tracker.Community Development at the Federal Reserve.Survey and Diary of Consumer Payment Choice.Center for Workforce and Economic Opportunity.Center for Quantitative Economic Research (CQER).Center for Financial Innovation and Stability (CenFIS).Advancing Careers for Low-Income Families.Research REIN New Orleans Request Information.Research REIN Nashville Request Information.Research REIN Miami Request Information.Research REIN Jacksonville Request Information.Research REIN Birmingham Request Information.Research REIN Atlanta Request Information.
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