Compulsive Gambling in the Stock Market: Evidence from an Emerging Market
Issued Date
2023-01-01
Resource Type
eISSN
22277099
Scopus ID
2-s2.0-85146538269
Journal Title
Economies
Volume
11
Issue
1
Rights Holder(s)
SCOPUS
Bibliographic Citation
Economies Vol.11 No.1 (2023)
Suggested Citation
Kamolsareeratana A., Kouwenberg R. Compulsive Gambling in the Stock Market: Evidence from an Emerging Market. Economies Vol.11 No.1 (2023). doi:10.3390/economies11010028 Retrieved from: https://repository.li.mahidol.ac.th/handle/123456789/81526
Title
Compulsive Gambling in the Stock Market: Evidence from an Emerging Market
Author(s)
Author's Affiliation
Other Contributor(s)
Abstract
During the COVID-19 pandemic, many new individual investors globally entered the stock markets, often pursuing speculative investment strategies that resemble gambling. A concern is that trading as a form of gambling can become addictive for some people, as documented by several recent studies in developed markets. We contribute to this literature by adding new evidence from a large emerging market, Thailand, where most forms of traditional gambling are illegal. We field a diagnostic checklist from the American Psychiatric Association for compulsive gambling, changing the content of each item to refer to stock market trading instead of gambling. In a survey of 285 Thai investors, we document that 9.5% are potential problem gamblers, while 4.9% meet the stricter criteria for addiction. The trading addiction score explains speculative trading behavior such as frequent trading, day trading and buying high-risk “lottery” stocks, beyond common factors such as overconfidence and high risk-tolerance. Further, the trading addiction score is positively related to high levels of stress and alcohol use, problems often associated with gambling disorders. Our results raise awareness about investors whose objectives are more related to gambling than long-term investment, and the associated problems when such behavior becomes compulsive.