It is now more than four years since I poured scorn on the way that the press were briefed to say that a ‘lowly civil servant’ had managed to lose a copy of the entire child benefit data base because he was distracted by major sporting events which were taking place.
Well perhaps I was wrong to be so rude.
The European Central Bank* has a lot on its plate right now but has still found time to publish a paper with the catchy title of ‘The pitch rather than the pit’ which proves that stock market traders at least were distracted by the 2010 World Cup.
In order to check the plausibility of their econometric analysis the authors also tested the effects of another distracting event – lunch.
Although the number of trades did indeed fall during the time when people could be expected to be taking lunch, traders did not seem to take their eye off the metaphorical ball & fail to respond to important news which affected stock prices in the same way as they did when they had a soccer ball to watch.
The paper has a bibliography of over 30 pieces of relevant academic work, with titles such as ‘The flexibility of the workweek in the United States: Evidence from the FIFA World Cup’, ‘Exploitable Predictable Irrationality: The FIFA World Cup Effect on the U.S. Stock Market’ and ‘Good Day Sunshine: Stock Returns and the Weather’
A belated apology to those New Labour spin doctors.
*Important note: the report carries on its cover a disclaimer: This Working Paper should not be reported as representing the views of the European Central Bank (ECB).
