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

36 Pages Posted: 22 Oct 2019

See all articles by Brigitte Roth Tran

Brigitte Roth Tran

Federal Reserve Bank of San Francisco

Multiple version iconThere are 2 versions of this paper

Date Written: September 6, 2019

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

JEL Classification: Q54, L81, D12

Suggested Citation

Roth Tran, Brigitte, Sellin' in the Rain: Adaptation to Weather and Climate in the Retail Sector (September 6, 2019). FEDS Working Paper No. 2019-067, Available at SSRN: https://ssrn.com/abstract=3473053 or http://dx.doi.org/10.17016/FEDS.2019.067

Brigitte Roth Tran (Contact Author)

Federal Reserve Bank of San Francisco ( email )

101 Market Street
San Francisco, CA 94105
United States

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