Reassessment of the Weather Effect: Stock Prices and Wall Street Weather

Recent research in behavioral finance has investigated whether investors’ mood fluctuations induced by hours of sunshine affect investment decisions in a significant manner such that equity mispricing follows. Some research in this area has concluded that there is a systematic relationship between security markets and local weather, while other research has found no relationship between investment decisions and hours of sunshine. This paper aims to study the weather effect and its possible evolution over time in an effort to consolidate the different findings in the field