We know that foul weather can affect our mood. Can it also impact our productivity, how we interpret data, and even the stock market?

“We have this notion of rainy day blues that goes back for centuries, but there’s been little rigorous study, especially of large populations of professional individuals,” says Assistant Professor Joshua Madsen.

Madsen and his colleague sought to change this and gain insights into how weather could be affecting financial markets by studying a group whose work is very public: equity analysts.

“Analysts turn out to be a really nice laboratory because their work becomes visible,” adds Madsen.

They are also located around the country and often experience different weather conditions when processing a company’s earnings announcement. In Madsen’s sample, which spanned more than six years, the average company earnings announcement had seven equity analysts following the company who were located in three-and-a-half cities.

The findings? Despite having the same incentives to issue their research, analysts based where the weather was unpleasant on the day of the earnings announcement (i.e., rainy, windy, cloudy) were less likely to issue a report and when they did, they tended to take more time to do so than their peers responding to the same announcement but experiencing more pleasant weather that same day.

In addition to being less productive, the research team found that analysts issuing a forecast from a city with foul weather tended to be more pessimist about a company’s future outlook than contemporaneous forecasts from analysts in cities with pleasant weather that same day.

“For me, it boils down to understanding that the world is all around us, it affects us, and that we don’t live in an isolated lab,” says Madsen. “We were able to identify at least one friction affecting the activities of these analysts and showed some possible ramifications for the stock market in terms of efficient prices as a consequence of this reduced activity by analysts.”

Madsen says simple awareness of this phenomenon can help the market and individuals operate more efficiently and effectively. He advises us all to be mindful of our own environment and mood, recognizing that it might have an effect on our work.

That weather can affect your behavior has implications both for how you think about markets as well as for how you think about yourself.