Climatic Disasters and Distracted Analysts

Posted: 8 Jul 2020 Last revised: 30 Sep 2023

See all articles by Yuqi Han

Yuqi Han

Wenzhou-Kean University

Connie X. Mao

Temple University - Fox School of Business and Management

Hongping Tan

McGill University

Chi Zhang

University of Massachusetts Lowell

Date Written: June 12, 2020


Using climatic disasters in the U.S., we find that earnings forecasts by analysts who experienced a major climatic disaster become less accurate than those by the unaffected analysts within three months after the disaster due to distracted attention. Disaster-zone analysts are more likely to allocate their attention to firms of greater importance or salience, and they tend to reiterate their previous forecasts to maintain the quantity and timeliness of their forecasts. Furthermore, we find that climatic disasters adversely affect the information environment of firms that are unaffected by the disasters but covered by disaster-zone analysts, suggesting a spillover effect of idiosyncratic shocks via financial intermediaries. Overall, we document the real impact of cognitive bias on financial professionals’ performance.

Keywords: Climatic Disasters; Analyst; Earnings Forecast; Limited Attention; Salience; Spillover

JEL Classification: G24, G41, Q54

Suggested Citation

Han, Yuqi and Mao, Connie X. and Tan, Hongping and Zhang, Chi, Climatic Disasters and Distracted Analysts (June 12, 2020). Contemporary Accounting Research, Forthcoming, Available at SSRN: or

Yuqi Han

Wenzhou-Kean University ( email )

88 Daxue Rd
Ouhai Dist
Wenzhou, Zhejiang

Connie X. Mao

Temple University - Fox School of Business and Management ( email )

416 Alter Hall
Philadelphia, PA 19122
United States
215-204-4895 (Phone)
215-204-1697 (Fax)

Hongping Tan

McGill University ( email )

1001 Sherbrooke St. West
Montreal, Quebec H3A1G5 H3A 2M1

Chi Zhang (Contact Author)

University of Massachusetts Lowell ( email )

Pulichino Tong Building
Manning School of Business
Lowell, MA 01854
United States

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