For the study, researchers used data on daily hospitalizations for mental disorders in Taiwan over 4,000 days between 1998 and 2009. They found that a 1,000-point fall in the Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX) coincided with a 4.71 percent daily increase in hospitalizations for mental disorders.
The researchers report that a downward daily change in the stock price index coincided with significantly increased hospitalizations for mental disorders. For example, when the stock price index decreased by 1 percent in a single day there was a 0.36 percent increase in hospitalizations for mental disorders on that same day.
The researchers also found that falls in the stock price index on consecutive days were associated with a 0.32 percent daily increase in mental disorders hospitalizations. And when the stock price index fell consecutively for five days, there was a 1.6 increase in the number of mental disorder hospitalizations on the fifth day.
These effects were found to be significant for both genders, according to the researchers. However, daily and consecutive changes in stock price index had a greater impact on men’s mental health.
The researchers also found that low stock price index and a daily change in stock price index had a significant effect on hospitalizations for people between the ages of 35 and 54, while consecutive changes affected those between the ages of 45 and 54.
The results suggest that the mental health of middle-aged males may be critically influenced by the stock market — when the stock price index is low, hospitalizations for mental illness are relatively high, according to the researchers, led by Dr. Chung-Liang Lin at Dong Hwa University and Dr. Chin-Shyan Chen and Dr. Tsai-Ching Liu at Taipei University.
The researchers used stock market movements as a proxy for changes in economic conditions and assessed the relationship with mental disorders using data from the National Health Insurance Research Dataset published by the National Health Research Institute of Taiwan.
“The stock market became the most watched indicator for much of the economic recession,” said Lin. “Drops in the value of stocks can, and often do, announce a reduction in wealth and the multiplication of business failures with consequential pay cuts or layoffs. Indeed, it is reasonable enough for people to have dire fears about the future, and those fears are heavily reinforced by media coverage.
“A falling stock market, therefore, influences investors’ and the public’s emotional, psychological and economic problems that could adversely affect mental health. Our results suggest that if someone is undergoing stressful and depressed conditions or has a mental illness, they should be encouraged to pay less attention to daily stock market movements, particularly middle-aged people who are suffering various pressures coming from job security, family, and investments.”
The researchers noted that the study has several limitations including the diagnoses of mental disorders rely on data reported by physicians or hospitals, which may be less accurate than diagnoses carried out individually.
Also, the researchers were unable to analyze the impact of socioeconomic and behavioral factors, such as education, employment, or smoking, on mental disorder hospitalizations.
The study was published in the journal Health Policy and Planning.
Source: Oxford University Press