Fresh Air Eases Work – The Effect of Air Quality on Individual Investor Activity
Steffen Meyer and
No 24048, NBER Working Papers from National Bureau of Economic Research, Inc
This paper shows that air quality has a significantly negative effect on the likelihood of individual investors to sit down, log in, and trade in their brokerage accounts controlling for investor-, weather-, traffic-, and market-specific factors. In perspective, a one standard deviation increase in fine particulate matter leads to the same reduction in the probability of logging in and trading as a one standard deviation increase in sunshine. We document this effect for low levels of pollution that are commonly found throughout the developed world. As individual investor trading can be a proxy for everyday cognitively-demanding tasks such as office work, our findings suggest that the negative effects of pollution on white-collar work productivity are much more severe than previously thought. To our knowledge, this is the first study to demonstrate a negative impact of pollution on a measure of white-collar productivity at the individual level in a western country.
JEL-codes: D14 G11 J22 J24 Q51 Q53 (search for similar items in EconPapers)
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