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I am making cupcakes and was wondering if it is okay if you leave the batter out for a couple hours before cooking.

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Yes, it is bad. Most baking powder will begin to produce co2 as soon it gets wet. If you let the batter rest before putting it in the oven, your cake will thus lose some of airiness.

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Interesting point. I wonder how much it would effect a sponge cake as baking powder is usually double acting so you will still get a rise when baking and a lot of the fluffiness will come from whipped eggs which shouldn't lose air that quickly. – Sobachatina Dec 7 '11 at 16:34
Good point. I have changed "a lot" to "some". – soegaard Dec 7 '11 at 16:45
I will never double a batch of American pancakes again, because the last time I tried it, the last batter went completely flat by the time the first two thirds were fried. OK, it was a mix of soda bicarbonate and paking powder, but I still had no leavening left in a much shorter time than 2 hours. So, I agree with this answer - the effect is strong enough to make it impractical to leave batter out. – rumtscho Dec 7 '11 at 17:34
@rumtscho- two notes. 1- I always make quadruple batches of pancakes. There must be other variables involved. 2- Many sponge cake recipes don't include any leavener at all besides the egg whites. – Sobachatina Dec 7 '11 at 17:49
@Sobachatina : the difference is likely double-acting baking power. It'll produce CO2 both when it gets wet, and then again when it gets heated, so there's still rise even if the batter has been sitting for a while. – Joe Oct 18 '15 at 16:15

Eggs being left out is, of course, bad but the risk of egg contamination is very low, sugar is a preservative, the batter is being baked and 2 hours isn't long anyway.

Unless your room temperature is 85F or the batter sat out for 6 hours I wouldn't worry about it at all.

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