Tom Chang

Using data from a large commercial bank and a large retail insurance company, we examine the impact of the stock market performance on individual financial decision-making. We find that daily stock market volatility is correlated with an increase in the contemporaneous demand for life insurance and a decrease in the number of loans approved in a manner difficult to reconcile with rational choice theory. These results suggest that financial market conditions have a direct, psychological effect on the financial decision-making of both financial professionals and the general public.

This paper studies differences in the effect of temperature on cognitive performance by gender in a large controlled lab experiment (N=543). We study performance in math, verbal and cognitive reflection tasks and find that the effects of temperature vary significantly across men and women. At higher temperatures, women perform better on a math and verbal task while the reverse effect is observed for men. The increase in female performance in response to higher temperature is significantly larger and more precisely estimated than the corresponding decrease in male performance. In contrast to math and verbal tasks, temperature has no impact on a measure of cognitive reflection for either gender. Our findings suggest that gender mixed workplaces may be able to increase productivity by setting the thermostat higher than current standards.

We investigate the effect of pollution on worker productivity in the service sector by focusing on two call centers in China. Using precise measures of each worker’s daily output linked to daily measures of pollution and meteorology, we find that higher levels of air pollution decrease worker productivity by reducing the number of calls that workers complete each day. These results manifest themselves at commonly found levels of pollution in major cities throughout the developing and developed world, suggesting that these types of effects are likely to apply broadly. When decomposing these effects, we find that the decreases in productivity are explained by increases in time spent on breaks rather than the duration of phone calls. To our knowledge, this is the first study to demonstrate that the negative impacts of pollution on productivity extend beyond physically demanding tasks to indoor, white-collar work.