TY - JOUR
T1 - In the mood to consume
T2 - Effect of sunshine on credit card spending
AU - Agarwal, Sumit
AU - Chomsisengphet, Souphala
AU - Meier, Stephan
AU - Zou, Xin
N1 - Publisher copyright:
© 2020 Elsevier B.V. All rights reserved.
PY - 2020/12
Y1 - 2020/12
N2 - Using a large, representative sample of high-frequency credit card transactions in the United States, this paper examines the causal effect of sunshine-induced mood on contemporaneous household credit card spending. We document a 0.3 percent increase in credit card spending in response to a one-unit increase in the same-day local abnormal sunshine. The spending response is stronger for consumers with higher credit card debt, lower FICO score, and shorter tenure with the bank. The effect manifests in long-term, durable goods spending, and is not driven by other weather conditions, complementarity between sunshine and consumption, or intentional choice of consumption time. We document similar responses of spending on seasonal and non-seasonal goods and during times with high and low sunshine levels. Finally, the sunshine effect occurs among consumers with various characteristics.
AB - Using a large, representative sample of high-frequency credit card transactions in the United States, this paper examines the causal effect of sunshine-induced mood on contemporaneous household credit card spending. We document a 0.3 percent increase in credit card spending in response to a one-unit increase in the same-day local abnormal sunshine. The spending response is stronger for consumers with higher credit card debt, lower FICO score, and shorter tenure with the bank. The effect manifests in long-term, durable goods spending, and is not driven by other weather conditions, complementarity between sunshine and consumption, or intentional choice of consumption time. We document similar responses of spending on seasonal and non-seasonal goods and during times with high and low sunshine levels. Finally, the sunshine effect occurs among consumers with various characteristics.
KW - Consumption
KW - Credit cards
KW - Household finance
KW - Mood
KW - Sunshine
UR - http://www.scopus.com/inward/record.url?scp=85092905898&partnerID=8YFLogxK
U2 - 10.1016/j.jbankfin.2020.105960
DO - 10.1016/j.jbankfin.2020.105960
M3 - Journal article
AN - SCOPUS:85092905898
SN - 0378-4266
VL - 121
JO - Journal of Banking and Finance
JF - Journal of Banking and Finance
M1 - 105960
ER -