Sand in My Eyes Fled Effect: An Evidence from Saudi Arabia

Psychological, cultural, religious and environmental factors affect human decisions and sometimes cause irrational behaviours. Even this is a common truth, traditional economics claims human is rational and many economic theories based on this idea. Behavioural Finance and Behavioural Economics go against this main assertion and postulates human has bounded rationality. This study investigates influences of the daily weather conditions such as mean and maximum air temperatures, mean and maximum air humidity values and Apparent Temperature Index (ATI) on Riyadh Stock Exchange. Granger Causality Modelhas been applied to these data, and found that daily mean water vapour pressure and daily maximum air temperature variables of the daily weather have affected the Riyad Stock Exchange returns. © 2018, Springer International Publishing AG, part of Springer Nature.