Keywords: Consumption, retail sales, weather
Abstract: Monthly fluctuations in consumer spending are often attributed
to the weather. This paper presents a model in which weather
affects the productivity of time in nonmarket activities (such
as shopping or recreation), and so, via time and budget constraints,
may induce substitution in spending across goods and over time.
Using monthly data on retail sales and weather data from the
National Weather Service, I find that unusual weather has a
modest but significant role in explaining monthly sales fluctuations.
However, lagged effects often offset original effects, so that
weather's influence tends to wash out at a quarterly
Full paper (1770 KB PDF)
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Last update: March 10, 2000