Heh, a rare example of the "proof of correlation isn't proof of the absence of causation" fallacy. No reason that stock markets couldn't perform worse on Mondays because of the extra traffic pollution.
But it's not like companies provide daily sales performance data to trade on. Markets move on speculation. They aren't actually pegged to company performance.
How would lower cognitive ability make markets move lower on a daily basis? All I can think is higher pollution creating greater pessimism among traders.
Markets aren't perfectly efficient. Some trades are dumb. People with lower cognitive ability are more likely to place an order and forget to check fundamentals first, forget to check competitor data, or quiet frankly make whopper mistakes like confusing a ticker symbol. Think of the loons you see on /r/wallstreetbets and other spots. They live on a spectrum, and all of us have bad days.
People with impaired cognitive ability are more likely to make dumb mistakes. That seems pretty obvious to me. The only question is whether or not the effect is large enough to measure using a coarse statistic like this, but that's a quantitative argument.
Yes, but for most dumb trades, there is someone on the other end making a deal. So the 'dumb' trades would have to lean more towards selling rather than buying.
Perhaps pollution just makes one more pessimistic and therefore bearish.
I don't think so. `Correlation => Causation` is used all the time - this is the bread and butter of clickbait headlines and articles "new study shows that...", but `Correlation => ^Causation` requires some sophistication to state ... while being wrong at the same time. Maybe a tactic used to mislead? I haven't seen it ever used.
To be clear `Correlation => ^Causation` is different to `Correlation => TRUE`. (In other words, there is nothing you can deduce from correlation alone).
How would lower cognitive ability make markets move lower on a daily basis? All I can think is higher pollution creating greater pessimism among traders.