Effects of catastrophic financial loss on suicide risk: Evidence from Korean stock market crash in October 2008
Kim, W., Park, H., Park, J.J. & Kook, W.
Purpose: The negative effect of catastrophic financial loss on suicide risk is widely perceived but hardly studied in-depth because of various difficulties in designing studies. We empirically investigated the effect utilizing the stock market crash event in October 2008 in South Korea.
Methods: We extracted stock market investor data from Korea Exchanges, and mortality data from Microdata Integrated Service of individuals aged 30-60 years. We calculated age-standardized monthly suicide rate per 100,000 persons according to sex and age, and developed intervention analysis with multiplicative seasonal ARIMA model to isolate the effect of the stock market crash on suicide rate.
Results: More than 11% of people aged 30-60 years were directly investing in stocks during stock market crash. In October 2008, both KOSPI and KOSDAQ indexes dropped by 22.67% and 30.14%, respectively. In November 2008, the suicide rate in males 30-60 years increased by > 40% compared to the expected levels if there had been no market crash, and in females aged 30-40 and 40-50 years, it increased by 101.84% and 74.81%, respectively. The effect appeared to persist in males, whereas it degenerated with time in females during our sampling period. Suicide was more pronounced in younger age groups and females.
Conclusion: In this first in-depth study, the effect of catastrophic financial loss negatively affects suicide risk for an extended period, indicating health and financial authorities should provide a long-term financial and psychological support for people with extreme financial loss.