A Note on the Relationship between Financial Asset Returns and Well-Being

This note considers the effect of changes in the well-being of U.S. residents owing to changes in the value of various financial assets. Ordinary least squares estimates reveal that equity market returns have a significant, and asymmetric, impact on well-being. This result is likely the result of a wealth effect whereby rising (falling) stock markets increase (decrease) the ability to meet basic needs and this contributes to a shifting assessment of life-situation and overall well-being