Economic hardship and suicides

We investigate the determinants of aggregate suicides in 15 OECD countries during 1960 – 2010 using an economic model where changes in welfare constitute the propagation mechanism for suicide. In the model we assume that agents have habits in terms of their (level of) consumption. The relationship between actual consumption to this level of habit consumption provides us a hardship index which is the key variable in the empirical application. In this application, we compute the index for all sample countries and test whether we can predict changes in suicide with this index. The performance of this index is remarkably good. In practical terms, this means that at least some fraction of suicides is related to the well-being of individual agents. This is certainly consistent with most of the earlier research results. The novelty of our paper is, however, that we can explain changes in suicide with this single index that corresponds to a basic economic decision rule. Moreover, the results are strikingly robust in terms of the various control variables that have been suggested or used in previous empirical analyses.