Aftermath of Hurricane Katrina | Photo credit: Jason Reed/Reuters (original article here)
Do Disruptive Life Events Affect How Analysts Assess Risk? Evidence from Deadly Hurricanes
Do Disruptive Life Events Affect How Analysts Assess Risk? Evidence from Deadly Hurricanes
Disruptive life events affect financial analysts’ judgments.
Key Takeaways:
Disruptive life events, such as hurricanes, affect how financial analysts assess risk.
Analysts in states affected by hurricanes issue less optimistic forecasts for non-affected firms after the events.
The effect of disruptive life events is strongest for analysts who have never experienced such an event in their office location.
The impact of disruptive life events on analysts' judgments largely dissipates after two years.
"I think everybody was stressed out and in a bad mood. I remember having, you know, drinking probably more than I should have and losing my temper. But I think a lot of people have similar thing..."
"I think everybody was stressed out and in a bad mood. I remember having, you know, drinking probably more than I should have and losing my temper. But I think a lot of people have similar thing..."
An analyst who experienced Hurricane Katrina told us during a phone interview.