Full Title: Finance and Economics Discussion Series Divisions of Research & Statistics and Monetary Affairs Federal Reserve Board, Washington, D.C.
Author(s): Brigitte Roth Tran
Publisher(s): Federal Reserve Board
Publication Date: September 6, 2019
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Using novel methodology and proprietary daily store-level apparel and sporting goods brand data, I find that, consistent with long-run adaptation to climate, sales sensitivity to weather declines as historical norms and variability of weather increase. Short-run adaptation to weather shocks is dominated by changes in how much people buy on the day of the event. There is 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, I find no evidence that eCommerce offsets any of the effects.