Facebook's Happiness Index Linked to Stock Market Behavior
Stock market movements are affected by emotions, not just cold calculations.
Using Facebook’s Gross National Happiness Index (GNH), researchers at Erasmus University in the Netherlands and Scotland’s University of Glasgow found a causal relationship between Facebook sentiment and stock market behavior.
Facebook’s GNH index attempts to estimate the aggregated mood and well-being of the Facebook population by applying automated sentiment analysis to the status updates of millions of users.
The study, which was published in the Journal of Economic Behavior & Organization this month, examined the relationship between daily sentiment on Facebook and trading behavior in 20 countries.
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