In the Mood to Consume: Effect of Sunshine on Credit Card Spending

Using a large, representative sample of high-frequency credit card transactions in the United States, this paper examines the causal effect of sunshine-induced mood on contemporaneous household credit card spending. We document a 0.3 percent increase in credit card spending in response to a one-unit increase in the same-day local abnormal sunshine. The spending response is stronger for consumers with higher credit card debt, lower FICO score, and shorter tenure with the bank. The effect manifests in long-term, durable goods spending, and is not driven by other weather conditions, complementarity between sunshine and consumption, or intentional choice of consumption time. We document similar responses of spending on seasonal and non-seasonal goods and during times with high and low sunshine levels. Finally, the sunshine effect occurs among consumers with various characteristics.

Agarwal, Sumit and Chomsisengphet, Souphala and Meier, Stephan and Zou, Xin, In the Mood to Consume: Effect of Sunshine on Credit Card Spending (October 12, 2020). Journal of Banking and Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3014541 or http://dx.doi.org/10.2139/ssrn.3014541