Of all the professions in the world, I always feel that one of being a cricketer must be a really difficult one. Being an economist is just so much easier.

Firstly, no one understands what economists do. When you tell anyone that you are an economist, they get this glazed look in their eyes as they frantically try to understand how you might be contributing to society in general. Then you explain to them quite kindly that you are working on a computational general equilibrium model currently and you will be able to tell them how to better society the moment it converges after its 253rd iteration and they start edging off to the other end of the room, preferring to leave you alone.

No such luck in cricket. Everyone, I mean simply everyone, understands cricket. And everyone, I mean simply everyone, is also a cricket coach. Take the case of my uncle, who was such a terrible bowler that he used to chuck the ball backwards for a boundary whilst bowling. Apparently, the only bowler in the history of gully cricket who used to make his own team go white with fright when he used to bowl. Uncle had come visiting us last week, and was unfortunately our guest when the India-Pakistan match was played out in the Asia Cup. Now, Uncle was in top form through the match. He was coaching Bhuvaneshwar Kumar live during the match through our TV, ‘Aargh, no no Bhuvi, you aren’t pitching it right!’ At least he is pitching it at the opponent, I thought darkly.

And then the pressure of chasing the target. As the match moved into its finale, India needed 41 runs off 24 balls. Uncle was now at his statistical best, informing us in a booming voice that we now needed to make only 2 runs per ball. Two runs per ball ‘only’? It must be mad level of stress for the cricketers batting in the last over with the pressure of expectations of ‘only’ 134 crore people riding on their shoulders. I shudder to think of the stress per capita on the cricketers. And economists make it worse.

There are recent papers in behavioural economics which claim that wins or losses in national sports events can have an impact on returns in stock markets. The premise is interesting (though scary for cricketers). Economic outcomes are the culmination of the decisions taken by a large number of players in the economy. How are decisions taken by economic agents? Are all decisions necessarily informed by a rational thought process, or are decisions also swayed by less-than-rational thoughts or mood swings of a person?

There is increasing evidence to suggest that actual decisions taken by agents deviate from the purely rational decisions that are predicted by economists. This deviation has its source in emotions. New research in neuroeconomics — which studies economics, finance, psychology and decision-making — suggests that mega-sporting events can lead to ‘collective mood-swings’. And collective mood swings within the investor community can lead to systemic impacts on stock markets.

Impact on stocks

A recent paper finds evidence of an asymmetric relationship between performance of the Indian cricket team in one-day internationals and stock returns. Wins by the Indian team do not lead to positive movements in stocks. But losses lead to a definite downturn in the markets the next day. The effect was seen to be stronger if Sachin Tendulkar was playing and India lost the match.

Whoa, whoa, whoa! Now that is exactly the kind of stuff our batsmen do not need to know in the last over. Now in addition to carrying emotional expectations of 134 crore people, the fellow is also literally carrying the risk of BSE Sensex falling on his shoulders. There is further bad news of the ‘moment’ — pun intended, if you are a statistician! Winning or losing a game of cricket can also spark off volatility in stock markets.

And it becomes worse. Winning an IPL game has a positive effect on the stock performance of the sponsor. Losing the game has a negative effect on the returns of the sponsor’s stock. So now, the batsman is carrying expectations of 134 crore people, the fate of returns and volatility of the Sensex and also the threat that the sponsor’s stock may underperform on his shoulders.

Last over – India needed 7 runs off 6 balls. By now, Uncle had taken to actually standing in front of the TV. ‘Why are you taking pressure?’ yelled Uncle when Jadeja was dismissed. ‘It’s not like you are going to cause the markets to fall!’ Sigh.

Epilogue for the uninformed. India won by 5 wickets. The Sensex fell the next day.

The writer is a brave economist trying to laugh against the odds