Edmans, A.Fernandez-Perez, A.Garel, A.Indriawan, I.2025-07-152025-07-152022Journal of Financial Economics, 2022; 145(2, Part A):234-2540304-405X0304-405Xhttps://hdl.handle.net/2440/145944This paper introduces a real-time, continuous measure of national sentiment that is language-free and thus comparable globally: the positivity of songs that individuals choose to listen to. This is a direct measure of mood that does not pre-specify certain mood- affecting events nor assume the extent of their impact on investors. We validate our music- based sentiment measure by correlating it with mood swings induced by seasonal factors, weather conditions, and COVID-related restrictions. We find that music sentiment is pos- itively correlated with same-week equity market returns and negatively correlated with next-week returns, consistent with sentiment-induced temporary mispricing. Results also hold under a daily analysis and are stronger when trading restrictions limit arbitrage. Mu- sic sentiment also predicts increases in net mutual fund flows, and absolute sentiment precedes a rise in stock market volatility. It is negatively associated with government bond returns, consistent with a flight to safety.en© 2021 Elsevier B.V. All rights reserved.Investor sentiment; Investor mood; Behavioral financeJournal article10.1016/j.jfineco.2021.08.0142024-05-10619143Indriawan, I. [0000-0002-6558-5551]