Analysts close to disasters make better calls, study claims

Gloomy forecasts from those traumatised by nearby events give quirky demonstration of behavioural bias

Past studies have shown surprising influences on sell-side analysts’ calls, from the weather to national pride to stubbornness. The latest in the line is as quirky as any, suggesting that physical proximity to traumatic events can make analysts more pessimistic – but also more accurate.

Carina Cuculiza and Alok Kumar at the University of Miami, and Constantinos Antoniou and Anastasios Maligkris at Warwick Business School, studied sell-side analysts’ earnings forecasts for US companies between