Weather as a Critical Component in Investment Strategies: Insights for Stakeholders

Emon Kalyan Chowdhury and Tasnim Uddin Chowdhury
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Emon Kalyan Chowdhury: Chittagong Independent University
Tasnim Uddin Chowdhury: Premier University

A chapter in Machine Learning Technologies on Energy Economics and Finance, 2025, pp 311-332 from Springer

Abstract: Abstract This study aims to assess the influence of weather conditions on investment choices, particularly in regions susceptible to natural disasters. A comprehensive investigation is conducted using various statistical models such as autoregressive conditional heteroskedasticity, vector error correction, Granger causality, and multivariate regression. Yearly data spanning from 1995 to 2022 are analyzed, taking into account factors such as stock performance, weather patterns, lending options, economic growth, inflation rates, and interest rates. The findings of the analysis reveal significant results, emphasizing the positive and noteworthy role of weather in shaping investment decisions. By integrating weather patterns into their decision-making processes, investors can skillfully mitigate risk and enhance their return on investment. This research provides invaluable insights for stakeholders, including investors, financial institutions, and policymakers, underscoring the essentiality of considering weather as a critical component in ensuring secure, stable, and profitable investments.

Keywords: Stock markets; investor behavior; Weather; Investment decision; GARCH (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isochp:978-3-031-95099-5_14

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DOI: 10.1007/978-3-031-95099-5_14

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