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 language | English |
---|---|
Journal | Review of Finance |
Volume | 28 |
Issue | 3 |
Pages (from-to) | 1105-1149 |
Number of pages | 45 |
ISSN | 1382-6662 |
DOIs | |
Publication status | Published - May 2024 |
Keywords
- Air quality
- Productivity
- Retail investors
- Trading Behavior
- retail investor
- trading behavior
- productivity
- air quality