The advent of computerized trading platforms and fintech has made investing in stocks easier and more accessible to individuals around the world. This has led to an increase in stock market participation in many countries, including China.
From 2000 to 2022, the number of people investing in stocks in China increased from 29.3 million to 322.6 million. As a result of this increased investment, fluctuations in the stock market can have a significant effect on the finances of many individuals and their families.
Drastic changes in wealth or financial difficulties resulting from these stock market fluctuations can also affect the mental and physical health of investors. In fact, several recent reports have found a correlation between stock market fluctuations and specific physical and psychological issues.
Researchers at the National University of Singapore, Jinan University, Peking University and Sun Yat-sen University recently explored this potential link further, focusing on the relationship between stock market fluctuations and emergency room visits associated with stress in China. Their findings, published in Mental Health Naturefound a trend marked by greater emergency room visits by individuals experiencing stress-related mental health problems during periods of stock market volatility.
To study the relationship between stock market fluctuations and emergency room visits in China, this team of researchers statistically analyzed data collected at the largest hospitals in Beijing over three years, spanning from 2009 to 2012. These data, which were specific to emergency room visits for potentially stress-related reasons were analyzed in relation to China’s stock market trends over the same period.
“Using data on daily emergency room visits from the three largest hospitals in Beijing from January 1, 2009 to December 31, 2012, we find that a one percentage point decline in daily market returns (Growth Enterprises Index) is associated by 0.185 (P = 0.040, confidence interval (CI) = 0.009 to 0.361, or 0.7%) increased the incidence of cardiovascular disease and 0.020 (P = 0.060, CI = 0 to -0.041, or 2.5%) increased the incidence of mental disorders on that day,” Sumit Agarwal, Siyu Chen and their colleagues wrote in their paper.
“Furthermore, a one percentage point increase in daily market returns (Growth Enterprises Index) is associated with a 0.035 (P = 0.007, CI = 0.010 to 0.059, or 3.3%) increase in cases of alcohol abuse on that day”.
Overall, the results of the analyzes conducted by Agarwal, Chen, and their colleagues suggest that stock market shocks had immediate effects on cardiovascular disease and mental health disorders in the period between 2009 and 2012, as stock market volatility was associated with more emergency room visits for these stress-related physical and mental issues. As the data used by the researchers was over a decade old, they stressed the need for additional studies using more recent medical and financial data.
“The health effects are highly nonlinear, immediate, and more pronounced for older people and men,” write Agarwal, Chen and their colleagues.
“In contrast, diseases that are less related to psychological stress (for example, infections and parasitic diseases) are not significantly affected by market fluctuations. A back calculation suggests that a ten percent drop in daily market returns is associated with with an increase of about RMB 35 million in national medical expenditure related to emergency room services.”
This latest study may soon inspire further research examining the health-related costs of stock market fluctuations. In their paper, the researchers also hint at the possibility of conducting additional studies on this topic using digital medical records collected during the COVID-19 pandemic, when more individuals accessed medical services online rather than visiting physical facilities. health care.
More information:
Sumit Agarwal et al, Associations between stock market fluctuations and stress-related emergency room visits in China, Mental Health Nature (2024). DOI: 10.1038/s44220-024-00267-5
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