We trace the impact of formative experiences on portfolio choice. Plausibly exogenous variation in workers’ exposure to a depression allows us to identify the effects and a new estimation approach makes addressing wealth and income effects possible. We find that adversely affected workers are less likely to invest in risky assets. This result is robust to a number of control variables and it holds for individuals whose income, employment, and wealth were unaffected. The effects travel through social networks: individuals whose neighbors and family members experienced adverse circumstances also avoid risky investments.

We test whether investor mood affects trading with data on all stock market transactions in Finland, utilizing variation in daylight and local weather. We find some evidence that environmental mood variables (local weather, length of day, daylight saving and lunar phase) affect investors' direction of trade and volume. The effect magnitudes are roughly comparable to those of classical seasonals, such as the Monday effect. The statistical significance of the mood variables is weak in many cases, however. Only very little of the day-to-day variation in trading is collectively explained by all mood variables and calendar effects, but lower frequency variation seems connected to holiday seasons. JEL-classification: D03, G11, G12

We build on the social heuristics hypothesis, the literature on the glucose model of self-control, and recent challenges on these hypotheses to investigate whether individuals exhibit a change in degree of trust and reciprocation after consumption of a meal. We induce short-term manipulation of hunger followed by the trust game and a decision on whether to leave personal belongings in an unlocked and unsupervised room. Our results are inconclusive. While, we report hungry individuals trusting and reciprocating more than those who have just consumed a meal in a high trust society, we fail to reject the null with small number of observations (N = 101) and experimental sessions (N = 8). In addition, we find no evidence of short-term hunger having an impact on charitable giving or decisions in public good game.

This study examines ex-dividend day trading behavior of all investors in the entire Finnish stock market. Consistent with the dynamic dividend clientele explanation, investors with a preference for dividend income buy shares cum-dividend and sell ex-dividend; the reverse is true for investors with the opposite preferences. Untaxed mutual funds engage in overnight arbitrage by selling shares cum and buying ex. Studying trades at the level of an individual investor shows idiosyncratic risk to be an important determinant in the choice of tax arbitrage stock. Analysis of the proportion of tax-motivated overnight trades reveals that transaction costs and dividend yield jointly determine whether the degree of tax arbitrage activity is nonzero. JEL classification: G35

This study examines ex-dividend day trading behavior of all investors in the entire Finnish stock market. Consistent with the dynamic dividend clientele explanation, investors with a preference for dividend income buy shares cum-dividend and sell ex-dividend; the reverse is true for investors with the opposite preferences. Untaxed mutual funds engage in overnight arbitrage by selling shares cum and buying ex. Studying trades at the level of an individual investor shows idiosyncratic risk to be an important determinant in the choice of tax arbitrage stock. Analysis of the proportion of tax-motivated overnight trades reveals that transaction costs and dividend yield jointly determine whether the degree of tax arbitrage activity is nonzero. JEL classification: G35