Český finanční a účetní časopis 2010(3):49-62 | DOI: 10.18267/j.cfuc.75

Analysis of the Impact of Weather on Trading in Equity Markets

David Havlíček
Ing. David Havlíček - interní doktorand; Katedra bankovnictví a pojišťovnictví, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, Praha 3; <david.havlicek@vse.cz>.

This paper analyzes the impact of weather on the investment in the Czech and U.S. stock markets. It relies on the concept of behavioral finance, which analyzes the impact of psychology on investor decision-making. The influence of atmospheric phenomena is mainly studied as impact of occurrence of snow, rain or fog on the market returns. The research results show the impact of these phenomena only in a minority of cases. The research also analyzes the impact of the autumn season (SAD effect) on the psychology of investors and therefore market returns. This sequence wasn't rebutted only at the Czech stock market. The incidence of observed atmospheric effects also failed to explain the January and Monday effects.

Keywords: Behavioral finance; Weather; Monday effect; January effect.
JEL classification: G11, G14

Published: October 1, 2010  Show citation

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Havlíček, D. (2010). Analysis of the Impact of Weather on Trading in Equity Markets. Czech Financial and Accounting Journal, 2010(3), 49-62. doi: 10.18267/j.cfuc.75
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