Social Mood Index

I'm just a wandering on the face of this earth
Meeting so many people
Who are trying to be free
--Moody Blues

The nascent field of socionomics (see www.socionomics.org) is concerned with the causal nature of collective mood on social behavior. I see big value in Kevin Depew's fieldwork on the relationship between social mood and markets.

Makes me wonder about the utility of a 'social mood index.' If validated, such a metric could help test the growing number of propositions about the influence of social mood.

What components might a social mood index include? I've yet to dig into the literature, but would think social mood has numerous dimensions. The one most cited in Kevin's work relates to collective appetite for risk, and ranges from risk averse to risk seeking. Some metrics that might be reflective of risk appetite include savings rates (saving vs spending), 3 month t-bill rates (time preference proxy), and credit creation (willingness to lever).

Whatever the measures, would think the 'best' ones would be leading indicators of phenomena such as price declines in stock market indices such as the S&P 500 (SPX). This would be necessary to demonstrate causality.

no positions