Blame It On the Rain: Weather Shocks and Retail Sales

70 Pages Posted: 28 May 2019

See all articles by Brigitte Roth Tran

Brigitte Roth Tran

Board of Governors of the Federal Reserve System

Date Written: January 12, 2016

Abstract

Failure to attribute retail sales variation to weather shocks can result in biased demand forecasts, misinterpretation of nancial indicators, and undue volatility in commission-based pay. I estimate retail sales responses to weather shocks using proprietary national daily store-level apparel and sporting goods sales data combined with a weather index. Developed using the lasso method, this index allows for seasonally and regionally heterogeneous nonlinear responses. The worst 5 percent of weather shocks decrease daily store sales by 20 percent. These losses are permanent with limited shifting of sales between indoor and outdoor malls and no substitution to e-commerce.

Keywords: Weather, lasso, machine learning, retail sales, adaptation

JEL Classification: Q54, L81, C5

Suggested Citation

Roth Tran, Brigitte, Blame It On the Rain: Weather Shocks and Retail Sales (January 12, 2016). Available at SSRN: https://ssrn.com/abstract=3381302 or http://dx.doi.org/10.2139/ssrn.3381302

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

Register to save articles to
your library

Register

Paper statistics

Downloads
25
Abstract Views
119
PlumX Metrics