April 4, 2024 - Tyler Kleppe (Daylight saving time and finances)

Behind the Blue

LEXINGTON, Ky. (April 4, 2024) – Every year, more than 97% of Americans, and more than 1.6 billion people worldwide, move their clocks forward one hour in the spring — allowing for more evening light as part of daylight saving time (DST).

Sure, that “spring forward” might make you more noticeably tired and cranky. But time is more than just numbers on a clock — it's a force that shapes our days, our routines and even our well-being.

And according to Tyler Kleppe’s new research, that heavy-eyed feeling doesn’t just impact simple day-to-day tasks.

In fact, the assistant professor in the Gatton College of Business and Economics at the University of Kentucky, has shown losing that hour is also affecting higher stakes decisions — like investing for one’s retirement.

“Even if you're not directly involved in capital markets, our financial system is relevant to all of us,” Kleppe said. “That’s why it remains important to evaluate regulatory actions and continue asking if they are effective.”

A number of studies show that DST transitions can negatively impact decision-making processes due to the disturbance they have on our circadian rhythm.

For example, research finds people experience more pronounced mood swings. There are also more serious consequences, such as an increase in car accidents and an uptick in health complications.

But little is known about the influence on financial markets.

“Really the core question we're exploring here is: can that disruption impact how investors respond to firms’ earnings disclosures?” Kleppe explained. “Then, we can have one more piece of evidence to help inform the national debate surrounding daylight saving time.”

On this episode of ‘Behind the Blue’, Kleppe discusses his research on how DST transitions impact investors’ reactions to corporate earnings news.

You can also learn more about Kleppe and his research here, and you can find more information about Gatton College here.

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