With summer coming to a close and the days getting shorter, your clients may start to develop a lower appetite for risk. A new study shows that sunlight makes people far more likely to take risks with their money.
A multidimensional study conducted by Nicholas Reinholtz, Leonard Lee and Michel Pham of Colombia Business School, to be published in the October edition of “The Journal of Consumer Research,” uses data and experiment to confirm prior studies on human mood and behavior on sunny versus cloudy days. Of particular relevance, sunny days have been associated with higher stock market returns than cloudy days, they noted.
On the observational side, monitoring an outdoor parking lot in Singapore showed that the sunnier the weather, the more severe drivers' parking violations became. They also did a separate analysis of 40 years of Major League Baseball data which revealed that stolen-base attempts are far more likely during day games than night games,
“Our current research extends these findings by providing evidence that exposure to sunlight, and not simply sunny weather, can increase an individual’s tendency to select a higher-risk course of action,” Reinholtz said. “In our first laboratory study, we manipulate exposure to outside sunlight and show increased risk taking on the Balloon Analog Risk Task (BART) —a standard behavioral measure.”
In the balloon test a participant is presented with a balloon and offered the chance to earn money by pumping up a virtual balloon by clicking a button. Each click causes the balloon to incrementally inflate and money to be added to a counter up until some threshold, at which point the balloon is overinflated and explodes. Each pump confers greater risk, but also greater potential reward. If a participant chooses to cash-out prior to the balloon exploding then they collect the money earned for that trail, but if balloon explodes earnings are lost.
In the lab study, the researchers showed that participants exposed to artificial sunlight choose to play higher-risk gambles than those exposed to standard sources of lighting.
The researchers also conducted real-world field studies. In the first they showed that Singaporean drivers were more likely to risk parking tickets on sunnier days, as measured by solar radiation levels. In the second, using 40 years of data they showed that major league baseball players attempt to steal more bases during day games – versus night games – and on days with higher levels of solar radiation.