Theory suggests that, in the presence of local bias, the price of a stock should be decreasing in the ratio of the aggregate book value of firms in its region to the aggregate risk tolerance of investors in its region. We test this proposition using data on U.S. Census regions and states, and...

We estimate a model of damage to corporate earnings from COVID-19. A pandemic decreases earnings due to costly mitigation and lower growth rates. The arrival of a vaccine, modeled as a Poisson process, reverts earnings to normal. We fit our model to timely measures of expected damage given by...

We derive a parsimonious model of damage to corporate earnings from COVID-19. Using measures of expected damage from industry-level earnings forecast revisions, we estimate this model with nonlinear least squares and identifying restrictions related to forecast rationality. Forecasts in mid-May...

Using data on household portfolios and mortgage originations, we find that households residing in a city with few publicly traded firms headquartered there are more likely to own an investment home nearby. Households in these areas are also less likely to own stocks. This only-game-in-town...