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Short-Term Household Economic Stress Effects on Retail Activity in El Paso, Texas

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Abstract

Economic stress indices are beginning to be developed as gauges of business cycle conditions for regional economies. Although the popularity of these metrics is increasing, there have been only a small number of studies that analyze the effectiveness of these tools for monitoring regional economic developments. This effort employs data for one such index that is maintained by the University of Texas at El Paso Border Region Modeling Project. The sample period covers December 2002 through March 2019. Specific components of the index include inflation, unemployment, and housing prices. Estimation results indicate that the effects of any changes in economic stress levels may take approximately 16 months to be fully experienced within the El Paso retail sector. Simulation results indicate that a one-time, 1-point increase in economic stress leads to a $2.987 million decrease in monthly retail sales.

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Data Availability

Data employed for this study are archived as part of the ScholarWorks online collection of the University of Texas at El Paso Library, https://scholarworks.utep.edu/ef_data/3/.

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Acknowledgements

Helpful comments and suggestions were provided by Steven Fullerton, the editor, and an anonymous referee.

Funding

Financial support for this research was provided by El Paso Water, National Science Foundation Grant DRL-1740695, Texas Department of Transportation ICC 24-0XXIA001, TFCU, and the UTEP Center for the Study of Western Hemispheric Trade.

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Authors and Affiliations

  1. Department of Economics & Finance, University of Texas at El Paso, El Paso, TX, 79968-0543, USA

    Thomas M. Fullerton Jr.

  2. ADP, 1851 North Resler Drive, El Paso, TX, 79912, USA

    Patricia Arellano-Olague

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  1. Thomas M. Fullerton Jr.
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  2. Patricia Arellano-Olague
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Correspondence to Thomas M. Fullerton Jr..

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Fullerton, T.M., Arellano-Olague, P. Short-Term Household Economic Stress Effects on Retail Activity in El Paso, Texas. Atl Econ J 50, 27–35 (2022). https://doi.org/10.1007/s11293-022-09744-7

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