The Role of Weather on Investors’ Monday Irrationality: Insights from Malaysia

Evidence supporting the weekend effect, also known as Monday Irrationality, has shown that conventional finance is unable to follow a rational behavior assumption. Many scholars have proposed a behavioral approach to explain this phenomenon; however, few studies have investigated this effect empiric...

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Main Authors: Rayenda Brahmana, Chee Wooi Hooy, Zamri Ahmad
Format: Article
Language:English
Published: University of Finance and Management, Warsaw; Vistula University 2014-06-01
Series:Contemporary Economics
Online Access:http://ce.vizja.pl/en/download-pdf/id/341
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spelling doaj-cca35958dfbe43e6a8fdf6d6d288a7e62020-11-24T23:03:38ZengUniversity of Finance and Management, Warsaw; Vistula UniversityContemporary Economics2084-08452014-06-0182112310.5709/ce.1897-9254.139341The Role of Weather on Investors’ Monday Irrationality: Insights from MalaysiaRayenda Brahmana0Chee Wooi Hooy1Zamri Ahmad2---Evidence supporting the weekend effect, also known as Monday Irrationality, has shown that conventional finance is unable to follow a rational behavior assumption. Many scholars have proposed a behavioral approach to explain this phenomenon; however, few studies have investigated this effect empirically. Interestingly, literature on weather patterns and the preliminary results of our study have identified a particular weather cycle that occurs on Mondays, when the temperature in Malaysia is higher compared with other days. Therefore, this paper aims to investigate the role of weather on investors’ Monday irrationality. By analyzing the market index and size-based portfolio formation model from 1999 to 2010, this research study found that the weather influenced investors’ mood, causing anomalous conditions in the market. Our findings conclude that the mood of investors plays an important role on investment decisions and the resulting Monday irrationality of investors.http://ce.vizja.pl/en/download-pdf/id/341
collection DOAJ
language English
format Article
sources DOAJ
author Rayenda Brahmana
Chee Wooi Hooy
Zamri Ahmad
spellingShingle Rayenda Brahmana
Chee Wooi Hooy
Zamri Ahmad
The Role of Weather on Investors’ Monday Irrationality: Insights from Malaysia
Contemporary Economics
author_facet Rayenda Brahmana
Chee Wooi Hooy
Zamri Ahmad
author_sort Rayenda Brahmana
title The Role of Weather on Investors’ Monday Irrationality: Insights from Malaysia
title_short The Role of Weather on Investors’ Monday Irrationality: Insights from Malaysia
title_full The Role of Weather on Investors’ Monday Irrationality: Insights from Malaysia
title_fullStr The Role of Weather on Investors’ Monday Irrationality: Insights from Malaysia
title_full_unstemmed The Role of Weather on Investors’ Monday Irrationality: Insights from Malaysia
title_sort role of weather on investors’ monday irrationality: insights from malaysia
publisher University of Finance and Management, Warsaw; Vistula University
series Contemporary Economics
issn 2084-0845
publishDate 2014-06-01
description Evidence supporting the weekend effect, also known as Monday Irrationality, has shown that conventional finance is unable to follow a rational behavior assumption. Many scholars have proposed a behavioral approach to explain this phenomenon; however, few studies have investigated this effect empirically. Interestingly, literature on weather patterns and the preliminary results of our study have identified a particular weather cycle that occurs on Mondays, when the temperature in Malaysia is higher compared with other days. Therefore, this paper aims to investigate the role of weather on investors’ Monday irrationality. By analyzing the market index and size-based portfolio formation model from 1999 to 2010, this research study found that the weather influenced investors’ mood, causing anomalous conditions in the market. Our findings conclude that the mood of investors plays an important role on investment decisions and the resulting Monday irrationality of investors.
url http://ce.vizja.pl/en/download-pdf/id/341
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