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Board of Governors of the Federal Reserve System (US)
Finance and Economics Discussion Series
The effects of weather on retail sales
Martha Starr-McCluer
Abstract

Monthly fluctuations in consumer spending are often attributed to the weather. This paper presents a model in which weather affects the productivity of time in nonmarket activities (such as shopping or recreation), and so, via time and budget constraints, may induce substitution in spending across goods and over time. Using monthly data on retail sales and weather data from the National Weather Service, I find that unusual weather has a modest but significant role in explaining monthly sales fluctuations. However, lagged effects often offset original effects, so that weather's influence tends to wash out at a quarterly frequency.


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Martha Starr-McCluer, The effects of weather on retail sales, Board of Governors of the Federal Reserve System (US), Finance and Economics Discussion Series 2000-08, 2000.
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Keywords: Consumption (Economics) ; Retail trade ; Econometric models
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