shoonlee
commented
3 years ago @wbinzhe Those are good points. I would like to think about the relationship between retail and weather in the following way:
- We can start by thinking of a utility maximizing agent who determines how to use their time and money (e.g., people can either go on a shopping - in an extreme case, even if they don't plan to buy anything a priori - or go on a trip when weather is nice).
- Having said that, weather affects the way people spend their time/money or there could be certain physical needs from our body that has to be satisfied, and shopping behavior will be determined by the substitutability or complementarity with the way people change their behavior accordingly.
- Of course, these are extremely hard to observe but at least in terms of the conceptual framework, we can start from there.
- When doing a lit review, take a look at papers that discuss how people change their behaviors in general (not restricted to retail) when weather changes (especially heat-related).
wbinzhe
The study of weather (typically temperature, rain, and sunlight) on retail started 1950s and are replicated by multiple datasets (daily and yearly), according to the review of Stulec (2013). We would like discuss something beyond this point.
Fundamentally, what are the temperature shock? A quick sum: a. the high cost of staying outdoor (e.g., travelling over space); b. what type of product desired; c. the storage cost (batch size of those perishables, this one is not discussed much in the weather-retail literature, but I will leave it here since I think this will have some application on housing-amenity co-location).
Handbury & Moshary: chain pricing responses to external local shocks (taste of IO and finance). Use the rising temperature as a local shock.