Fresh Air Eases Work—the Effect of Air Quality on Individual Investor Activity

Steffen Meyer*, Michaela Pagel

*Corresponding author for this work

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

1 Citation (Scopus)

Abstract

This article shows that contemporaneous and lagged air pollution negatively affects the likelihood of German individual investors to log in and trade in their brokerage accounts, using intraday data and controlling for investor-, weather-, traffic-, and market-specific factors. A 1 SD increase in air pollution leads to a 1.3 percent reduction in the probability of logging in, which is larger than the response to a 1 SD increase in sunshine. We argue that changes in air pollution affect productivity in cognitively demanding tasks, such as trading. Our results are robust to macroeconomic productivity shocks, nonlinearities, or measurement error.

Original languageEnglish
JournalReview of Finance
Volume28
Issue3
Pages (from-to)1105-1149
Number of pages45
ISSN1382-6662
DOIs
Publication statusPublished - May 2024

Keywords

  • Air quality
  • Productivity
  • Retail investors
  • Trading Behavior
  • retail investor
  • trading behavior
  • productivity
  • air quality

Fingerprint

Dive into the research topics of 'Fresh Air Eases Work—the Effect of Air Quality on Individual Investor Activity'. Together they form a unique fingerprint.

Cite this