Sellin’ in the Rain: Adaptation to Weather and Climate in the Retail Sector

Brigitte Roth Tran

No 2019-067, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

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.

Keywords: Adaptation; Climate change; Lasso; Machine learning; Retail; Sales; Weather (search for similar items in EconPapers)
JEL-codes: D12 L81 Q54 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2019-09-06
New Economics Papers: this item is included in nep-env and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2019-67

DOI: 10.17016/FEDS.2019.067

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