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A New Kind of Peace Studies: The Stock Market

Please note that prior to May 2019, the Stanford King Center on Global Development was known as the Stanford Center on Global Poverty and Development.

Image of Tel Aviv stock exchange screen
Yaniv Morozovsky
Mar 27 2018

Posted In:

In the News, Center News

A new study by Center affiliate and Graduate School of Business Associate Professor of Politial Economy Saumitra Jha found that giving Israelis a short, though intensive, opportunity to trade stocks made them markedly more eager to negotiate a peace with Palestinians. People became less likely to vote for Benjamin Netanyahu’s harder-line Likud Party, more supportive of a two-state solution with Palestine, and more willing to make concessions to get a deal.

Perhaps more surprising, that heightened support for peace had staying power. Even though the stock-trading study lasted only seven weeks, and involved modest sums of money, the change in political attitudes was still apparent one year later.

“This was really a story about learning,” says Jha. “When people began investing in stocks, they became engaged and started to learn. They could see that stock prices rose if peace negotiations were re-starting and that prices went down if the peace process was collapsing. It changed their attitudes toward the peace process and their voting preferences.”

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