Atreya Dey (Judge Business School, University of Cambridge) will be presenting his work on “Volatile Temperatures and Their Effects on Equity Returns and Firm Performance”.
About this session: We construct a measure of abnormal temperature variability, defined as deviations in intra-month temperature anomalies from a rolling historical baseline, to study its effects on firms and asset prices. Firms with higher exposure to variability experience lower revenues and hours worked, driven by reductions in household spending and labor supply. A strategy based on cross-sectional variation in abnormal temperature variability yields a realized market-adjusted alpha of 4.9% annually. Disagreement over the materiality of climate risks and uncertainty in pricing these effects both increase volatility and slow the incorporation of temperature exposure into prices.
When: Monday 3rd of November
12.30-12.45 Light lunch and networking
12.45-13.45 Talk and Q&A.
Where: CRASSH meeting room (Alison Richards Building) on the Sidgwick site.
Lunch: A light lunch will be provided, but bring along your drink of choice!
Zoom: You can also join us virtually on Zoom.
The weekly climaTRACES workshops, organised by Kamiar Mohaddes and Henning Zschietzschmann, are attended by a diverse group of people from economics, geography, politics, engineering, business, earth sciences, natural sciences, and history, generating interdisciplinary discussion. One person leads the session, on either a paper they have written, a work in progress, or just an idea they have and would like feedback on. This is also an opportunity for people to find our more about the team on what climaTRACES have been up to and what future events and research projects are being developed.