Saturday, October 27, 2007

Sunday Dollars+sense: Careful on your trip to work

Daylight Saving began early this morning. (You might have to trust me on that too, unless you want to check by turning on your TV or radio and discovering that you have already missed your favourite programs.)

Early this morning we were meant to put our clocks forward an hour in order to help us get up and get on the road an hour earlier tomorrow, at a time when it will be darker and we will have had less sleep than usual.

It’s a recipe for accidents.

A Canadian psychologist, Stanley Coren has found a 7 per cent jump in road accidents the day after daylight saving begins, balanced by a 7 per cent drop in accidents when it ends.

When asked to explain why such a little change could have such a big effect he says, “We are all sleep deprived anyway so that extra loss of sleep is enough to lead to an accident”. His advice: “treat yourself as if you have jet lag”...

The changeover brings on more than accidents.

(And by the way, over the entire period road accidents are actually down during daylight saving time perhaps because of the extra light during the evening trip home.)

Economists examining the drop in US stock market prices between the end of trade on most Fridays and the start of trade on a Monday (yes, there is typically a drop) have found it to be twice to five times as big on the weekends after daylight saving comes in.

They say the change in the traders’ circadian rhythms gives them “greater anxiety about a given situation, all other things equal. They may prefer safer investments and shun risk in trades”.

The damage from the switchover in the United States: US$31 billion wiped off the value of stocks according to the researchers, although much of it would probably be recovered in subsequent days as the traders got back into their stride.

Andrew Worthington from the University of Wollongong has looked for the effect in Australia and can’t find it. Nor can he find a weekend effect of the kind documented in the US.

Perhaps we are more robust.

All the same, it’d be wise to take extra care on the roads tomorrow, and to try really hard not to be grumpy at work.


Mark J. Kamstra, Lisa A. Kramer, Maurice D. Levi, Losing Sleep at the Market: The Daylight Saving Anomaly, The American Economic Review, Vol. 90, No. 4 (Sep., 2000), pp. 1005-1011

Worthington, Andrew C., Losing Sleep At The Market: An Empirical Note On The Daylight Saving Anomaly In Australia. Economic Papers 22(4):pp. 83-93.

Stanley Coren, Sleep Deficit, Fatal Accidents, and the Spring Shift to Daylight Savings Time, University of British Columbia. 1998

Peter Martin, What if extending Daylight Saving didn't save electricity?, Canberra Times Monday, January 15, 2007