Mass Shootings and Their Impact on Retail

Abstract

Mass shootings in the U.S. have become more frequent, often targeting retail locations such as shopping malls that attract high foot traffic. We combine detailed data on mass shootings with debit and credit card transaction data at individual stores to assess the economic impact of mass shootings. Using a difference-in-differences framework, we find that affected stores experience lower demand, smaller order sizes, decreased foot traffic, and reduced customer dwell times, resulting in a significant decline in retail revenues. We also find the impact of mass shootings diminishes with distance, adversely affecting stores within a radius of up to 1.25 miles. Additionally, we examine the likelihood of store closures after incidents and factors contributing to store survival. Overall, we estimate the annual economic cost of mass shootings at $27 billion in lost revenues to retail businesses. Consistent with consumers’ fear and safety concerns, we observe heterogeneous effects by business type (e.g., non-essential stores are more impacted than essential stores), channel substitution from in-person to online shopping, and moderation by local exposure to gun-related violence.

Keywords: Retail, Natural experiments, Causal inference, Mass shootings, Difference-in-differences