This paper investigates the effect of public sentiment related to epidemiological crises on financial market movements. The outbreak of COVID-19 provided evidence of the havoc a pandemic can wreak on financial markets. The Ebola outbreak between December 2013 and January 2016 provides the ideal case study to isolate sentiment. Sentiment was quantified with established text processing methods, using news on viral events uncorrelated with other potential causes of market movements and incorporating publisher circulation. I find that epidemiological investor sentiment has a highly statistically significant, current, and non-linear relationship with individual company stock returns when controlling for company-specific fixed effects.
Silverstone, Ruben A.
"The Effect of Epidemiological Investor Sentiment on Financial Market Movements,"
Undergraduate Economic Review: Vol. 18:
1, Article 2.
Available at: https://digitalcommons.iwu.edu/uer/vol18/iss1/2