The Impact of Weather on the Retail Industry: Long and Short-Term Impacts

Faculty Leads: Georgia Perakis, interim dean and professor of Operations Research, Statistics and Operations Management at MIT Sloan School of Management; and Talia Tamarin-Brodsky, assistant professor in the department of Earth, Atmospheric, and Planetary Sciences at MIT.

Due to rising temperatures and increased frequency of weather extremes under climate change, it is likely that weather will continue to have even larger impacts on the economy, whether influencing worker productivity during heat waves and extreme cold conditions or consumer transactions in retail stores. Using data from different types of retailers, machine learning models will be developed in combination with weather evolution models towards studying the long-, medium-, and short-term effects of weather characteristics on the retail industry, focusing on sales. With results that can be easily extended to study other sectors in the economy, this research is an important first step towards building a deeper understanding of how weather influences our economy.