Study: Stock Losses Linked to Increased Visits to Chinese Emergency Rooms

In the stock market, losses can lead to stress. According to a recent study, the volatility of the Chinese stock market has caused distress among some mainland investors, to the extent that some have been sent to the emergency room for treatment.

This June, a study published in the “Journal of Behavioral Medicine” revealed that stock market volatility is causing stress, leading to physical and mental health issues (such as cardiovascular diseases or mental health problems), resulting in an increase in the number of people seeking treatment at emergency rooms.

The study utilized daily emergency room visit records from three major hospitals in Beijing between January 1, 2009, and December 31, 2012. It was found that for every one percent decrease in the daily market returns, there was a 0.185 percent increase in cardiovascular disease cases and a 0.020 percent increase in mental illness cases on the same day.

The researchers noted that based on rough calculations, a 10 percent decrease in the daily stock market returns could potentially lead to an increase of approximately 35 million RMB (4.9 million USD) in nationwide emergency room service-related medical expenses.

“The impact on health is highly non-linear and instantaneous, with a more significant impact on the elderly and males,” the researchers wrote.

In July 2015, following a sharp drop in Chinese stock prices, the stock market turmoil led to a surge in patients suffering from what doctors referred to as “stock market anxiety disorder.” According to mainland media reports, in some cities, some university students had to interrupt their studies due to the inability to let go of tracking their investments. Investors, unable to accept the significant economic losses following the stock price plunge, sought counseling help instead.

Since the data utilized by the researchers spans over a decade, they emphasized the need for updated medical and financial data for further research. However, many Chinese investors today are sharing their post-stock market loss traumas on social media platforms. A user on Xiaohongshu (Little Red Book) posted that she was diagnosed with depression after losing over a million RMB in stock trading. Many others responded to her post, sharing similar struggles and pressures they faced thereafter.

From the year 2000 to 2022, the number of individuals investing in stocks in China increased from 29.3 million to a staggering 322.6 million. With the surge in investments, stock market volatility can have significant impacts on the financial situations of numerous individuals and their families.

Over the past few years, due to the pandemic, hits to the tech industry, and a sluggish real estate market, investor confidence has been shaken, leading to poor performance in the Chinese stock market. In the past three years, the benchmark Shanghai Shenzhen 300 Index has recorded annual losses. In an environment of overall economic uncertainty, many Chinese households have started cutting back on expenses such as travel and major purchases. On August 12th, the three major A-share indexes collectively dropped, with turnover falling below 500 billion RMB, reaching a low not seen since May 2022.

“In contrast, diseases with a smaller psychological stress relationship (such as infections and parasitic diseases) are not significantly affected by market volatility,” researchers remarked.

The researchers also suggested in their paper that utilizing the digital medical data collected during the COVID-19 pandemic could lead to further research on this topic, as more individuals were using online medical services during that time rather than visiting medical facilities.