Study Links Falls In The Share Market To Rises In Treatment For Mental Illness

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The thrill, rush, buzz and opportunity to make money in a volatile share market has long been known and loved by those in the game.

But what hasn’t, until now, been clear is how many have been mentally scarred by the financial markets.

A new study published today shows that falling share prices lead to increased hospitalisation for mental disorders.

The results suggest the mental health of middle-aged men may be critically influenced by what happens in the markets.

Dr Chung-Liang Lin at Dong Hwa University says: “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.”

Previous research has suggested that mental disorders are more likely to affect disadvantaged members of society, with financial hardship having a negative impact on psychological health.

The new research assessed the relationship between price movements and mental disorders using data on daily hospitalisations for mental disorders in Taiwan between 1998 and 2009.

They found that a 1,000-point fall in the Taiwan Stock Exchange Capitalisation Weighted Stock Index (TAIEX) coincided with a 4.71% daily increase in hospitalisations for mental disorders.

When the stock price index decreased by 1% in a single day there was a 0.36% increase in hospitalisations 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% daily increase in mental disorders hospitalisations.

When the stock price index falls consecutively for 5 days there was a 1.6% increase in the number of mental disorder hospitalisations on the fifth day.

Low stock price index and daily change in stock price index had a significant effect on hospitalisations for the 35-54 age groups while consecutive change affected the 45-54 age groups.

The research, led by Dr Lin and Dr Chin-Shyan Chen and Dr Tsai-Ching Liu at Taipei University, is the first of its kind to investigate a potential relationship between stock market volatility and nationwide prevalence of mental disorders.

The global financial crisis led to a decline in wealth for many and subsequent research has looked at the links between national economic conditions and the general health of the public.

Data have also shown that economic recession has an exacerbating effect on the use of mental health services and decline in reported happiness.

Most research on economic recession looks at involuntary job loss. Few studies have looked at the effects of a fluctuating stock market on health.

Dr Lin said:

“The stock market became the most watched indicator for much of the economic recession. 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.”

The study is published in Health Policy and Planning, a journal jointly published by the London School of Hygiene and Tropical Medicine and Oxford University Press.

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