Long- and Short-Run Adaptation of Consumption to Weather and Climate Change

32 Pages Posted: 8 Mar 2019

See all articles by Brigitte Roth Tran

Brigitte Roth Tran

Board of Governors of the Federal Reserve System

Date Written: February 18, 2019

Abstract

Using novel methodology and proprietary 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 shifting between indoor and outdoor stores offsets only a small portion of the contemporaneous response to weather, I find no evidence that e-commerce offsets any of the effects.

Keywords: adaptation, climate change, weather, machine learning, sales

JEL Classification: Q5, Q54, L81

Suggested Citation

Roth Tran, Brigitte, Long- and Short-Run Adaptation of Consumption to Weather and Climate Change (February 18, 2019). Available at SSRN: https://ssrn.com/abstract=3337110 or http://dx.doi.org/10.2139/ssrn.3337110

Brigitte Roth Tran (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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