H7N9 not only endanger human health but also hit stock marketing

Jiang, Yan; Zhang, Yi; Ma, Chunna; Wang, Quanyi; Xu, Chao; Donovan, Connor; Ali, Gholam; Xu, Tan; Sun, Wenjie

Figure 2(d) shows that the Avian Influenza Sector Index decreased with increasing daily rates of reported cases whenever the daily reported case number was less than or equal to four. However, whenever the daily number of reported cases was between five and 33, the index rose as the reported case numbers also rise. In this regards, behavioral economic studies have indicated that negative sentiment driven by pessimism and anxiety affects investment decisions which may also affect asset pricing [17, 18] . Given H7N9 outbreaks generate pessimism and anxiety, H7N9 would also affect investment decisions and hence asset prices. This is then amplified by so called herd behavior which can explain the rapid fall of stock prices at the initial stage of H7N9 reporting [19, 20] . On top of that, the "return to the central" theory [12] can also be used to explain that in latter stages of the outbreak, prices slowly return to the normal as people reevaluate the potential damage downward and begin to push asset prices back up.