Title: Do unhealthy cities produce unhealthy returns?

Authors: Nicole Choi; John R. Nofsinger; Corey A. Shank

Addresses: University of Wyoming, Laramie, WY, USA ' University of Alaska Anchorage, Anchorage, AK, USA ' Miami University, Oxford, OH 45056, USA

Abstract: We examine how firms headquartered in poor health communities affect their stock returns and valuations. We find that poor health throughout a community, measured through obesity rates, self-reported poor health status, and self-reporting poor physical or mental health, lowers stock returns and creates lower valuations. Specifically, we find that a 1% increase in overweight rates is associated with $100 billion in lost value to the USA stock market. Furthermore, this effect is more prominent in stocks with more retail investors. This suggests that poor community health influences local investor behaviour more strongly than employees affect local stock returns. These results have important implications as obesity rates continue to rise throughout the world.

Keywords: stock performance; health; obesity; mental health; physical health.

DOI: 10.1504/IJCG.2025.144248

International Journal of Corporate Governance, 2025 Vol.15 No.1, pp.1 - 27

Received: 15 Dec 2023
Accepted: 18 Feb 2024
Published online: 03 Feb 2025 *