Mad Men – the iconic show that was awarded Golden Globes, Emmys, and a host of other awards – ended this past Sunday evening.
You know what that means – time to be on the lookout for a drop in the stock market in the coming days.
Seem like a bit of a red herring?
Well, on Monday morning, NPR’s Shankar Vedantam reported on a study that shows the stock market dropping directly after our favorite shows end.
For the Love of TV
Gabriele Lepori, an economist from Keele University in the United Kingdom, was curious about the effect fictional characters have on us. To investigate, he has analyzed data from more than 105 TV show finales in the United States, starting with The Fugitive in 1967, along with other well-known shows like The Cosby Show, Seinfeld, and Friends.
“When a TV show ends, I observe a decrease in stock returns on the following trading day. The higher the number of TV viewers for that episode, the larger the decrease in stock returns,” said Lepori.
Lepori reasons that when these shows end, people are in mourning in a way. And when people are in mourning, they’re more risk adverse, and thus shy away from the markets.
Apparently, the emotional ties that people have to TV characters are akin to the way they feel about actual people.
“Since we see them every week, we tend to develop an emotional attachment with them,” said Lepori. “When we lose them, because a TV show ends, we experience a negative emotional reaction that’s similar to the reaction we would experience when a real relationship ends.”
Listen to the segment from yesterday morning here:
The Real Effect of Emotions
Vedantam reports that some evolutionary psychologists back up Lepori’s theory.
You see, for most of evolutionary history, the only “characters” we saw around us were real people. But today, a lot of the faces and voices we know come from technology. At a conscious level, we know that those people aren’t physically with us. But, at an unconscious level, the machinery in our brains makes us feel like these fictional people are our real companions.
Of course, a TV show ending does not always cause a drop in returns. This pattern appears only when looking at data over a very long time period – Lepori found an average effect over 150 series.
Still, it’s no secret that emotions affect the stock market. The Wall Street Journal even developed a quiz to help investors understand their own emotions better.
So, it might be good to keep the dates of other big series finales in mind.
The last Late Show With David Letterman is only a few days away on May 20. Nurse Jackie is ending on June 28. And The League is scheduled to end in the fall of 2015.