Research Design Connection: Light and Risk Taking

by Sally Augustin, Ph.D. | November 6th, 2017

  Glimcher and Tymula studied the effects of outdoor light intensity on risk taking behavior over a two-year period. They “found that increased luminance leads to less risk taking…the effects are…consistent, significant.” Some useful definitions: “Risk attitudes refer to people’s willingness to take known risks…‘luminance’ is a measurement of the amount of light that falls on the surface of the earth. Cloud cover, humidity, suspended particles in the atmosphere, time of day, time of year and a number of other factors influence luminance.” The researchers’ collection of data indoors was acceptable because the “psychological effects of higher intensity outdoor luminance are now well-known to persist for hours or even for days.” The researchers, in their conclusion, “note that manipulating the indoor luminance levels – the overhead light intensity – in markets like the New York Stock Exchange ought to have an effect on market volatility and risk premiums.” Paul Glimcher …