- Few studies have been conducted analyzing the economic impact of mass shootings; particularly in relation to the stock market.
- This project provides an investigation into the effects mass shootings have on various sectors of the stock market. To assess the impact, we investigated the trend in stock values of several publicly traded companies following notable high fatality mass shootings.
- Mass Shootings: There is a lack of consensus surrounding the definition of mass shootings (Nichols, 2017). Some databases define mass shootings as 4 or more people killed excluding the perpetrator while others broaden the range to 4 or more shot, killed, or injured (Ten Years of Mass Shootings, 2019)
- From 2014-2021 the US has had 3,393 mass shootings (Gun Violence Archive, n.d.). In 2021 alone, these mass shootings resulted in 705 deaths (Gramlich, 2022)
- Existing research focuses on gun sales and legislation, mental health outcomes, the media, and socio-economic responses. (Brodeur & Yousaf, 2019). Prior studies provide limited information on the economic impacts on mass shootings, partially in relation to the stock market
- Research into the economic effects of terrorism can be extended to possible outcomes for mass shootings. Mass shootings should exhibit similar patterns on the stock market due to their likeness to terrorism (Greenland & Savage, 2022)
- The Mother Jones Archive, an open-source database documenting mass shootings, was used to gather the 21 most lethal shootings from April 1999 to May 2022
- This study analyzes the adjusted closing stock returns of companies within 7 different categories following each mass shootings. The daily adjusted closing stock price was analyzed for 10 business days pre- and post-mass shooting.
- The data was obtained from Yahoo Finance historical data on the New York Stock Exchange (NYSE). A control variable for the general trend of the stock market was also used (S&P 500)
- A Chow test was then utilized to investigate if any changes occurred in the slope of the stock price before and after the mass shooting event.
- Analysis uncovered significance in stock price change in each category from as low as 48 percent to 71 percent
- Two thirds of the shootings had significant stock change in at least half of the categories
- Chow test determined regression coefficients for the days before and after the event and determined if 2 regressions fit the data better than one. At a 95 percent confidence interval, if the p-value was less than 0.05, the stock price change was deemed significant. Significance per shooting and per category were calculated as shown in Figure 1 and 2
The Impact of Mass Shootings on the Stock Market
Lauren Jaeger, Megan Rivera, Matthew Lehman, Michael G. Turner Ph.D.
Significance Among Each Category
Figure 1.
- Ammunition and Private Prison stock price had a significant change following 71 percent of the shootings analyzed
Figure 2.
- Las Vegas was shown to have significant stock price changes in all categories, while First Baptist only was significant in 29 percent of them
Pre-Event Regression
Post-Event Regression
Pooled Regression
Event
Stock Change Significance Across Shootings