Long- and Short-Run Adaptation of Consumption to Weather and Climate Change
32 Pages Posted: 8 Mar 2019
Date Written: February 18, 2019
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: Suggested Citation