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Regional Household Economic Stress and Retail Sales Fluctuations

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  • Thomas M. Fullerton
  • Ana P. Gutierrez-Zubiate

Abstract

Economic stress indices are used to monitor business cycle conditions in several regions. Although the deployment of these tools is spreading, there have been relatively few efforts to empirically assess the performance of these gauges, especially at the regional level. This study takes advantage of one such index that is published monthly and has more than 15 years of historical data. Results obtained confirm an inverse relationship between household economic duress and retail sales activity, but it is not found to be statistically reliable over the long-run. Deviations from equilibrium are found to last for 142 months. More relevantly, a 1-point increase in the index is associated with a $3.48 million decline in total commercial activity. Additional testing using data for other regions and/or economic variables appears warranted. Empirical analysis that examines additional potential short-run linkages for El Paso may also prove useful.

Suggested Citation

  • Thomas M. Fullerton & Ana P. Gutierrez-Zubiate, 2020. "Regional Household Economic Stress and Retail Sales Fluctuations," Business and Economic Research, Macrothink Institute, vol. 10(3), pages 23-34, September.
    • Handle: RePEc:mth:ber888:v:10:y:2020:i:3:p:23-34
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    References listed on IDEAS

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    Cited by:

    1. Thomas M. Fullerton & Patricia Arellano-Olague, 2022. "Short-Term Household Economic Stress Effects on Retail Activity in El Paso, Texas," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 50(1), pages 27-35, June.

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    More about this item

    Keywords

    Economic Stress Index; Regional Economics; Retail Sales; Time Series Analysis;
    All these keywords.

    JEL classification:

    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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