Study: Stock Market Declines May Be Deadly
SACRAMENTO (CBS Sacramento) – A study has found that declines in the stock market may put your health at risk.
Two U.C. San Diego finance professors conducted the study with 30 years worth of California hospital admission records and correlated them with the ups and downs of the stock market.
Professors Joseph Engelberg and Christopher Parsons found from 1983 to 2011 that hospital admissions increased following stock market drops, KMBZ reported. People admitted complained especially of anxiety, depression or other conditions of mental or emotional stress.
They presented “Worrying About the Stock Market: Evidence from Hospital Admissions” at the annual meeting of the American Economic Association. The professors have submitted it for peer review to the Journal of Finance, in hopes to have it published in upcoming months.
On Oct. 19, 1987, the market plunged nearly 25 percent on “Black Friday.” That day California’s hospital admissions spiked more than 5 percent.
“Stock market declines today result in psychological distress today,” Engelberg and Parsons wrote.
The professors’ research found that three decades’ of data demonstrated that “one standard deviation drop in U.S. stock prices (roughly -1.5 percent) increases admissions to California hospitals by about 0.26 percent over the next two days,” KMBZ reported.
According to the state’s Office of Statewide Health Planning and Development, more than 11,000 Californians are hospitalized each day on average.
In an unrelated study of North Carolina hospital patients by Duke University, the stock market crash of 2008 was found to be associated with a spike in the rate of heart attacks. That study was published in 2010 by the American Journal of Cardiology.