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The World Cup Syndrome

The world’s most-watched sporting event inspires passionate, emotional responses like no other. It can save football fans’ lives or drive them to suicide, boost and sink stock markets and economic activity, and cause investors to behave irrationally, especially if their team loses.

LONDON – As the world’s most popular sport, football (“soccer” to Americans) is often a pillar of national identity and a source of collective pride. That is why the FIFA World Cup can trigger intense emotions in a way that no other sporting mega-event can. This year’s tournament in Qatar is no different.

The 1998 World Cup, which took place in France, is instructive. A 2012 study identified a significant decline in France’s suicide rate during the month-long tournament and a dramatic 19.9% decrease in the days following the French team’s matches. France ultimately won that cup, but one’s team does not need to win to provoke an emotional response. A 2015 study found a substantial shift in the ratio of male-to-female births nine months after the 2010 games in South Africa, which the researchers suggested was the result of an increase in sexual activity during the tournament. And in Brazil, heart attacks spiked during the 1998, 2002, 2006, and 2010 World Cups, particularly on days when the Brazilian team played.

Similarly, several studies have found that international football tournaments can significantly affect markets. A 2016 study found that the Italian team’s performance has influenced domestic stock-market returns. National-level sporting victories, the authors concluded, can produce a sense of euphoria among investors. Losses, on the other hand, tend to depress investors, particularly non-institutional retail investors. Another study showed that losses tend to have a bigger negative impact on stock markets in countries with relatively more successful national teams, such as Spain and the United Kingdom. In countries with moderately successful teams, like Chile and Turkey, traders’ appetite for risk increased after a win.