Attention to Global Warming

Darwin Choi, Zhenyu Gao and Wenxi Jiang

The Review of Financial Studies, 2020, vol. 33, issue 3, 1112-1145

Abstract: We find that people revise their beliefs about climate change upward when experiencing warmer than usual temperatures in their area. Using international data, we show that attention to climate change, as proxied by Google search volume, increases when the local temperature is abnormally high. In financial markets, stocks of carbon-intensive firms underperform firms with low carbon emissions in abnormally warm weather. Retail investors (not institutional investors) sell carbon-intensive firms in such weather, and return patterns are unlikely to be driven by changes in fundamentals. Our study sheds light on peoples’ collective beliefs and actions about global warming.

JEL-codes: D83 G12 G14 G15 Q54 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (254)

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