Do agencies dump bad news on Fridays?

A new statistical report shows that “Bad News Fridays” is not just a myth for the Environmental Protection Agency.

While there have been many anecdotal reports that federal agencies tend to announce major enforcement and regulatory actions on Fridays—thus minimizing news coverage and financial market reactions—a study of 15 years’ worth of press releases from the EPA shows that the idea is backed by evidence.

The Resources for the Future think tank analyzed 21,493 press releases issued by the EPA between 1994 and 2009. The authors utilized machine learning and advanced text analysis tools to categorize the content in several dimensions.

Their study, released on Nov. 3, found that the EPA is more likely to release enforcement and regulatory actions on Fridays, and more likely to release news of awards on Mondays.

The EPA was twice as likely to announce regulatory changes on a Friday, in comparison to Mondays, Tuesdays or Wednesdays, the study said. Friday’s regulatory changes comprised 15 percent of all news releases, while totaling 7.5 percent each on the other three days. Thursdays’ regulatory releases were 10 percent of the total.

“Regulatory changes are less likely to be announced early in the week and more likely to be announced later in the week and before holidays. Only on Fridays and before holidays are there significantly more regulatory change press releases issued,” the study authors wrote.

The same trend was observed for enforcement actions. Thirty-three percent of all EPA press releases were enforcement actions announced on Fridays, the highest total of all weekdays.

On the other hand, award announcements were equally likely on Mondays through Thursdays, but less likely on Fridays.

“This may be because giving awards is less likely to generate negative attention for the EPA, or because the EPA wants to draw attention to awardees, in hopes that other individuals will follow their example,” the authors wrote.

The study also examined whether there were patterns for timing of press releases pertaining to specific companies, but they found no patterns.

The authors did not ask EPA officials to explain the Friday release trends, or to offer reasons for the strategic timing.

However, the study suggested EPA officials may be seeking to “minimize public reaction to potentially controversial news” with the timing of press releases. The authors also point out that releasing negative news on Friday, with less time for markets to react, tends to dampen the impact on firms in the stock market.

While the motivation of EPA officials in timing the releases is a matter of speculation, the authors also suggest that if deterrence and transparency are goals, then the EPA may be undermining its own goals.

“These findings suggest that there may be scope for improving the communication of regulatory actions, increasing the reaction of capital markets to environmental violations, and increasing the visibility, and therefore the deterrence, of enforcement actions,” the authors wrote.