This is a study from a few years ago, but still valid and newsworthy today. Harvard Business Review talks with the researcher about a study that shows: when air pollution goes up, the stock market goes down.
Researchers from the University of Ottawa found that every time there was a 1 standard deviation decrease in air quality (a high air pollution day), the stock market went down 12%. The researchers looked at air pollution and stock market returns every day, and compared high and low air pollution days.
The Harvard Business review interviewed the lead researcher, who said that they think that air pollution affects stock traders two ways: 1) it affects their mood and thinking ability, and 2) because their mood and thinking are off, they are more risk averse and the stock market goes down.
To be sure their research was really solid, the researchers looked at the air pollution at a monitor near Wall Street, and also at air pollution all across Manhattan where most of the the traders live. The looked at the S&P500, the New York Stock Exchange, and the Nasdaq. They looked at days when it was sunny, and also when it rained or the day after. They found the same results every time, so they are sure their research is strong.
Air pollution profoundly affects our health, the health of workers (including stock traders), and the economy.
Read the Harvard Business Review article here.
Read the economic study here.
12/06/2021
