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  • December 2024
  • Article
  • Review of Accounting Studies

Human Bias in the Oversight of Firms: Evidence from Workplace Safety Violations

By: Jonas Heese, Gerardo Pérez Cavazos and Andreya Pérez Silva
  • Format:Print
  • | Pages:36
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Abstract

We study the effects of mood as a source of human bias on regulators’ oversight and enforcement decisions. We use weather at facilities at the time of an OSHA inspection to proxy for the OSHA compliance officers’ mood. We find that during periods of good mood due to sunny weather, the number of workplace safety violations and dollar penalties assessed by the officer decrease. These effects are more pronounced when OSHA officers have more discretion. In turn, the effect of mood on oversight and enforcement decisions can be mitigated by increased monitoring by the regional OSHA office. Furthermore, our results suggest that there is a slightly higher incidence of workplace accidents after “good mood” inspections. Overall, our findings show that regulators’ mood results in bias in the oversight of firms.

Keywords

Prejudice and Bias; Governing Rules, Regulations, and Reforms; Happiness; Working Conditions; Safety

Citation

Heese, Jonas, Gerardo Pérez Cavazos, and Andreya Pérez Silva. "Human Bias in the Oversight of Firms: Evidence from Workplace Safety Violations." Review of Accounting Studies 29, no. 4 (December 2024): 3413–3448.
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About The Author

Jonas Heese

Accounting and Management
→More Publications

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  • Enterprise Resource Planning (ERP) System Implementations and Corporate Misconduct By: Jonas Heese and Joseph Pacelli
  • Non-Financial Violations By: Jonas Heese
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