The Effects of Weather on Retail Sales

25 Pages Posted: 6 Nov 2000

See all articles by Martha Starr

Martha Starr

American University - Department of Economics

Date Written: January 12, 2000

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.

JEL Classification: E21, E32, D21

Suggested Citation

Starr, Martha, The Effects of Weather on Retail Sales (January 12, 2000). Available at SSRN: https://ssrn.com/abstract=221728 or http://dx.doi.org/10.2139/ssrn.221728

Martha Starr (Contact Author)

American University - Department of Economics ( email )

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202-885-3747 (Phone)

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