Paper Abstract

Global warming has increased the frequency and intensity of extreme climate change events. We study the impact of severe climate change events, particularly wildfire smoke, on consumer purchases of sustainable products. We exploit the random dispersion of wildfire smoke as a natural experiment and analyze three large-scale wildfires from 2018, 2020, and 2023. We combined retail scanner data with air quality data for the first two events and conducted online surveys for the last event. We show that stores exposed to severe wildfire smoke experience an increased demand for sustainable cleaning products relative to stores facing little to no wildfire smoke. The increase occurs promptly after the wildfire smoke and dissipates after four months. We also find stronger effects for refill and unscented products, sustainable brands, and stores with smaller market shares of sustainable products. Survey results corroborate and extend our empirical findings by demonstrating the effect of exposure on attitudinal changes. In summary, this study documents the meaningful impact of climate change events on sustainable consumption by analyzing multiple events over the years using various methodologies. The study offers relevant and timely managerial insights as consumers are increasingly exposed to more intense and recurrent climate change events.

Lim, Taewook and Kim, TI Tongil and Kim, Suh Yeon, Consumer Response to Climate Change: Wildfire Smoke and Sustainable Product Choice (February 14, 2025). Georgetown McDonough School of Business Research Paper No. 4439697, Available at SSRN: https://ssrn.com/abstract=4439697 or http://dx.doi.org/10.2139/ssrn.4439697