Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2020:1: Happiness and Gold Prices

Hans Byström ()
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Hans Byström: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: We use the Twitter-based Hedonometer happiness index to study the link between happiness and gold price changes. We find no significant correlation between the two when we look at correlations across the entire distributions. However, turning to an extreme value theory (EVT) modeling of the tails of the non-normally distributed happiness distribution we find that during particularly depressing days the gold price often goes up. In a sense, gold is found to serve as a happiness-related safe haven, i.e. as a hedge against extreme unhappiness.

Keywords: Twitter; happiness; Hedonometer; gold price; tail; extreme value theory

JEL-codes: D83; G14; G41; G50

17 pages, February 24, 2020

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