Study examines link between stock market fluctuations and emergency room visits in China

The advent of computerized trading platforms and fintech has made investing in stocks easier and more accessible to individuals around the world. This has led to an increase in stock market participation in many countries, including China.

Between 2000 and 2022, the number of people investing in the stock market in China increased from 29.3 million to 322.6 million. Due to this increase in investment, fluctuations in the stock market can have a significant impact on the finances of many individuals and their families.

The drastic changes in wealth or financial difficulties resulting from these stock market fluctuations could also affect investors’ mental and physical health. In fact, some recent reports have linked stock market fluctuations to specific physical and psychological problems.

Researchers from the National University of Singapore, Jinan University, Peking University and Sun Yat-sen University recently explored this potential link in more detail, focusing on the relationship between stock market fluctuations and stress-related emergency room visits in China. Their findings, published in Nature Mental Healthhas revealed a trend of increased emergency room visits by people with stress-related mental health issues during periods of stock market volatility.

To study the relationship between stock market fluctuations and emergency room visits in China, the team of researchers statistically analyzed data collected from Beijing’s largest hospitals over a three-year period, from 2009 to 2012. These data, specific to emergency room visits for reasons potentially related to stress, were analyzed in conjunction with trends in China’s stock markets over the same period.

“Using daily records of emergency department visits from Beijing’s three largest hospitals from January 1, 2009, to December 31, 2012, we find that a one-percentage-point decrease in daily market returns (Growth Enterprises Index) is associated with a 0.185 (P = 0.040, confidence interval (CI) = 0.009 to 0.361, or 0.7%) increase in cardiovascular disease cases and a 0.020 (P = 0.060, CI = 0 to −0.041, or 2.5%) increase in mental disorder cases that day,” Sumit Agarwal, Siyu Chen, and colleagues wrote in their paper.

“Furthermore, a one percentage point increase in daily market returns (Growth Enterprises Index) is associated with a 0.035 (P = 0.007, CI = 0.010 to 0.059, or 3.3%) increase in binge drinking that day.”

Overall, the results of the analyses conducted by Agarwal, Chen, and their colleagues suggest that stock market shocks had immediate effects on cardiovascular disease and mental health disorders during the period from 2009 to 2012, as stock market volatility was linked to an increase in emergency room visits for these stress-related physical and mental health problems. Because the data used by the researchers were more than a decade old, they stressed the need for additional studies using more recent medical and financial data.

“The health effects are highly nonlinear, instantaneous, and more pronounced in older adults and men,” Agarwal, Chen, and colleagues wrote.

“In contrast, diseases less related to psychological stress (e.g., infections and parasitic diseases) are not significantly affected by market fluctuations. A rough calculation suggests that a ten percentage point decrease in daily market returns is associated with an increase of about RMB 35 million in national emergency department medical expenditures.”

This recent study could soon inspire further research into the health costs of stock market fluctuations. In their paper, the researchers also discuss the possibility of conducting further studies on this topic using digital health data collected during the COVID-19 pandemic, when more people sought medical services online instead of visiting health care facilities.

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