#2194. Temperature and trading behaviours

July 2026publication date
Proposal available till 30-05-2025
4 total number of authors per manuscript4010 $

The title of the journal is available only for the authors who have already paid for
Journal’s subject area:
Finance;
Economics and Econometrics;
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Abstract:
Motivated by the extant literature concerning the positive linear relationship between temperature and investors trading based on regional data (e.g., Schmittmann et al., 20XX), we re-examine the temperature effect by utilizing a dataset that encompasses a large number of individual investors accounts and a wider range of weather conditions, and construct a comprehensive measure of sensed temperature, Apparent Temperature, which incorporates atmospheric temperature, relative humidity and wind velocity. At a comfortable temperature, investors are more aggressive and tend to buy more stocks relative to selling. However, the relationship between Apparent Temperature and trading volumes displays a U-shape, suggesting that investors trade less on days when the temperature is comfortable, reducing non-financial opportunity costs. Our study provides original evidence of non-linearity, instead of the linearity documented by previous research.
Keywords:
Apparent temperature; Investors accounts data; Retail investors; Sentiment; Temperature; Trading behaviour

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