Friday, August 17, 2012

How Weather Affects Buying

We just can't help ourselves. Whatever we are thinking, doing, and feeling at the moment holds great power over our decisions. That's the finding from a National Bureau of Economic Research study of how the weather at the time of purchase influences which car or house we buy.

It's hard to argue with the analysis, which is based on data from more than 40 million vehicle sales and 4 million house sales, comparing the type of car or features of the house purchased to the weather at the time of purchase. The researchers find that "the choice to purchase a convertible, a 4-wheel drive, or a vehicle that is black in color is highly dependent on the weather at the time of purchase." Similarly buyers are more likely to choose a house with a swimming pool in the summer than in the winter.

Source: National Bureau of Economic Research, Projection Bias in the Car and Housing Markets, NBER Working Paper No. 18212 ($)

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