Air pollution and managers' forecasting ability

• 成果类型: Article; Early Access
• 署名作者: Ali, Ashiq; Fan, Zhongwen; Li, Siman
• 署名单位: University of Texas System; University of Texas Dallas; City University of Hong Kong; Lingnan University; Xiamen University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-025-09895-3
• 发表日期: 2025
• 关键词: SHORT-TERM EXPOSURE; institutional investors; economic consequences; productivity evidence; QUALITY; IMPACT; MARKET; association; disclosure; particles

摘要

This study examines the relation between U.S. managers' short-term exposure to air pollution and their forecasting ability. We focus on air pollution due to PM2.5, a fine particulate matter that can easily penetrate an indoor, climate-controlled environment. We show that the short-term ambient PM2.5 level at the firm's headquarters before a management earnings forecast issuance is negatively associated with the accuracy of the forecast. Also, the short-term ambient PM2.5 level before an earnings announcement is negatively related to the likelihood of a concurrent management forecast issuance. These relations occur at PM2.5 levels below the U.S. air quality standard. A battery of additional tests validate these findings. These results suggest that a transitory exposure to PM2.5 at levels common in the United States temporarily decreases managers' forecasting ability. The temporary cognitive impairment from short-term exposure to modest levels of PM2.5, as documented in epidemiological studies, is presumably the reason.