Emotional Abnormalities in Behavioral Finance

Document Type: Research paper

Authors

Abstract

There are many reasons so-called "behavioral finance". This topic is  for this, and the main ones are international especially relevant for those countries whose  integration in science and the emergence of economies are experiencing rapid growth (the  new technologies and innovative approaches to so-called BRIC group: Brazil, Russia, China, traditional scientific problems. The more India).  science develops, the newer questions arise. Over the past few decades, the Nobel Prize On March 14, 2008, the Second Annual in Economics has been awarded several times  Honorary Lecture by Morgan Stanley, held by for work at the intersection of the economy  Yale Professor and author of the famous books itself with sociology, social psychology and  Irrational Exuberance and New Financial Order personality psychology.  Robert Schiller, was held at the MICE. Noting Generally, the history of the development  the presence of a severe financial crisis on a of economic doctrines demonstrates a clear  global scale, the professor noted his connection tendency toward a rational beginning in the  with the psychology of the masses. According models of man and his economic behavior.   Starting with A. Smith, a person appears as a and features of the theory of behavioral  "competent egoist" striving to make economic finance.  decisions in the most logical and reasonably Proponents of the theory of behavioral  justified way possible. Deviations from the finance argue that psychology penetrates all  rational principle are considered as annoying three components of the traditional paradigm:  obstacles, distortions of the "right" approach to rational behavior, the CAPM model and an economic processes, evidence of the effective market [1].  imperfection of human nature [12]. An alternative to quantitative theories of  However, an objective view cannot fail to pricing for financial assets and portfolio  note that irrational economic behavior at all optimization methods are the so-called levels is more a rule relating to the vast "behavioral finance" - a relatively young area  majority of cases than a rare exception. that criticizes the res of quantitative  In our opinion, the key to understanding methods. The subject of  modern economic structures is the inclusion of impact human presence  human emotions in the sphere of economic financial markets. There is no person in the analysis. sta d finance course.  The cost of emotions is quite high. So, doctrine I how  buying a movie ticket for 100-500 rubles, the affects decision making in viewer actually buys the opportunity to households, financial markets, and  experience valuable emotions for him within a organizations. This does not imply that  half to two hours. Thus, the price of positive participants in financial relations will be  emotions in the Russian entertainment market rational and markets will not be friction. is 60-300 rubles/hour. In fact, the cost of Researchers believe the institutional  emotions is even higher, since the price of a environment is vital. The starting point for  movie ticket includes the price of risk that the them is to limit the rationality of all elements of  film will not be liked. the financial structure. The analysis of modem markets of Behavioral finance studies the causes and emotions (behavioral finance) is a necessary effects of financial market inefficiencies: where  element in modeling the structure of financial do market inefficiencies occur and why do they  flows both globally and regionally. The nature exist; why ordinary investors tend to make  and dynamics of emotions prevailing

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Highlights

• Impact of poor water and sanitation on household economy was investigated.
• Qualitative and quantitative approaches were used to assess the impact of poor water and sanitation on households economy.
• People have not access to proper sanitation facilities in most of the rural settlements .
• The diseases ratio was very high because of poor water and sanitation condition.
• Unawareness of WATSAN related diseases affect adversely on household economy by hospitalization, transportation and medical costs.