Does Air Pollution Affect the Stock Market?


The Effect of Air Pollution on Investor Behavior: Evidence from the S&P 500 (Abstract, Anthony Heyes, Matthew Neidell, Soodeh Saberian, National Bureau of Economic Research, Oct. 26, 2016)
Also discussed here: Why investors may want to keep tabs on air pollution (CBS News, Oct. 26, 2016)

And here: Air pollution and stock returns: Evidence from a natural experiment (Abstract, Gabriele M. Lepori, Journal of Empirical Finance, Jan. 2016)

And here: Does the weather have impacts on returns and trading activities in order-driven stock markets? Evidence from China  (Jing Lu, Robin K. Chou, Journal of Empirical Finance, Jan. 2012)

And here:  Air pollution and stock returns in the US (Abstract, Tamir Levy, Joseph Yagil, Journal of Economic Psychology, Jun. 2011)

Today we review several reports that look at the links, if any, between investment returns and short term changes in local air quality, as examined in the stock exchanges of the USA, Italy and China. There is some evidence that higher levels of fine particulate matter may reduce one day returns by almost 12%. Also, when the trading floor is near or within an area of higher air pollution, trading activity is affected.

The main trading room of the Tokyo Stock Excha...

The main trading room of the Tokyo Stock Exchange,where trading is currently completed through computers. (Photo credit: Wikipedia)

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