Are Gains Quiet and Losses Loud? Emotional Responses to Financial Booms and Crashes Online

TL;DR

This study analyzes Reddit data to compare emotional responses during financial booms and crashes, revealing stronger negative emotions during crashes and providing insights into online mental health impacts.

Contribution

It introduces a large-scale, real-time social media analysis of emotional responses to financial events, using quasi-experimental methods to compare different market conditions.

Findings

Negative emotional shifts during financial crashes

Weaker, mixed responses during financial booms

Implications for online mental health and community health

Abstract

Financial events negatively affect emotional well-being, but large-scale studies examining their impact on online emotional expression using real-time social media data remain limited. To address this gap, we propose analyzing Reddit communities (financial and non-financial) across two case studies: a financial crash and a boom. We investigate how emotional and psycholinguistic responses differ between financial and non-financial communities, and the extent to which the type of financial event affects user behavior during the two case study periods. To examine the effect of these events on expressed language, we analyze daily sentiment, emotion, and LIWC counts using quasi-experimental methods: Difference-in-Differences (DiD) and Causal Impact analyses during a financial boom and a financial crash. Overall, we find coherent, negative shifts in emotional responses during financial crashes, but weaker, mixed responses during booms. By exploring emotional and psycholinguistic expressions during financial events, we identify future implications for understanding online users' mental health and building connected, healthy communities.