Sellin’ in the Rain: Adaptation to Weather and Climate in the Retail Sector
Abstract: Using novel methodology and proprietary daily store-level sporting goods and apparel brand data, I find that, consistent with long-run adaptation to climate, sales sensitivity to weather declines with historical norms and variability of weather. Short-run adaptation to weather shocks is dominated by changes in what people buy and how they buy it, with little intertemporal substitution. Over four weeks, a one-standard deviation one-day weather shock shifts sales by about 10 percent. While switching between indoor and outdoor stores offsets a small portion of contemporaneous responses to weather, I find no evidence that ecommerce offsets any of the effects.
File(s): File format is application/pdf https://www.federalreserve.gov/econres/feds/files/2019067pap.pdf
Part of Series: Finance and Economics Discussion Series
Publication Date: 2019-09-06