Heatwaves are changing the way Australians live and spend their money, study finds
In short:
Australians are changing their spending habits during heatwave conditions, a study shows.
On days when maximum temperatures were 35C or higher, a $5.4 million collapse in daily daytime spending was recorded, according to peer-reviewed research.
The research found spending rebounded early in the morning or in the evening, a sign people are adapting to avoid intense weather.
Consumer spending surged by about 5 per cent between 6pm and 11pm during a recent heatwave, according to a study based on 200 million bank transactions.
Parts of the country sweltered through an unprecedented heatwave in January, with the maximum temperature record broken in Victoria and highs of above 49 degrees Celsius in New South Wales and South Australia.
Parts of Australia experienced a record-breaking heatwave in January. (ABC News: Abubakr Sajid)
A peer-reviewed study published recently in Nature's NPJ Urban Sustainability journal revealed that when heatwaves hit, Australians shift their spending behaviour to avoid intense conditions.
Millions lost in daytime heatwave spending collapse
The study's findings stem from anonymised Westpac Group bank card and EFTPOS data from more than 200 million transactions made by consumers in Sydney, Melbourne and Adelaide.
One of its authors, Shashi Karunanethy, a chief economist at the data analysis consultancy Geografia, said these capital cities were chosen because of the strength of their 24-hour and night-time economies.
The transaction data was re-weighted to account for Westpac's overall share of consumers in the Australian market and the spending habits of customers of other banks who paid for products or services using a Westpac EFTPOS terminal.
The researchers also used data from the Australian Bureau of Statistics Census to produce figures that were "representatives of total population spending".
Westpac says it serves more than 12.7 million customers and offers EFTPOS terminal services to more than 100,000 Australian businesses.
The study showed how behaviours shifted around hot days that occurred between January 1, 2023 and December 31, 2024, Dr Karunanethy said.
Researchers found on days when maximum temperatures were 35C or higher, which the Bureau of Meteorology classifies as a "hot day", a $5.4 million collapse in daily daytime consumer spending was recorded.
There was no evidence to suggest Australians altered their spending before a heatwave.
But they spent 2.4 per cent more in the seven days after high temperatures, the study showed.
"These findings suggest that heat shocks impose meaningful short-term disruptions to consumer activity," the study's authors said.
The findings also revealed declines in spending were mostly recorded in the early to late afternoon.
After taking into account people's anticipation of and recovery after a heatwave, researchers found a 12.1 per cent spending drop between the hours of midday and 3pm and a 13.3 per cent reduction between 3pm and 6pm.
Consumers' spending then rebounded the most between 6pm and 9pm in the seven days after a heatwave.
Dr Karunanethy said the findings showed Australians adapted their lives according to heat patterns but found it difficult to prepare ahead of a heatwave.
"People can't easily adapt in anticipation of a climate event because they have fixed schedules for work or if they have to pick up their kids from school," he said.
"It's not easy for them to necessarily adapt in anticipation of a heat event, but they can adjust after.
"This is the first quantitative evidence to show that people are adapting to heat around the 24-hour economy cycle.
"They're either going out shopping late at night the day of a heat event, or they are doing the shopping the night before or the morning after."
Where do Australians spend their money during a heatwave?
On hot days, consumers spent more in the morning and mid-to-late afternoon on products in certain retail categories in a bid to avoid experiencing the heat, the study showed.
Researchers said spending on bars and clubs between midday and 3pm rose by 10 per cent on heatwave days and remained up to 20 per cent higher than usual until midnight.
They also found purchases of "package liquor" such as beer, wine and spirits spiked by 50 per cent between 6am and midday on the day of a heatwave.
The research monitored consumers' spending by dividing 24-hour cycles into six- or three-hour windows.
Australians were most likely buying packaged alcohol closer to midday than 6am in that time period, Dr Karunanethy said.
"This is a particularly Australian adaptation," he said.
"One of the ways that people adapted was that they just went to the bars and cooled off there and had drinks.
"This is the only result where we wouldn't conjecture that it happens with other global cities — this is a uniquely Australian response."
Spending on dining dropped significantly between 3pm and 6pm but rebounded by 9pm, while "specialised food retailing" purchases made at grocers, butchers and independent food stores dropped the most between midday and 6pm, the study showed.
Researchers said "modest gains" were found in spending in those two categories in the morning hours between midnight and midday, suggesting people looked to avoid shopping during the peak of high temperatures.
Entertainment options such as cinemas experienced consumer spending declines between 3pm and 6pm and rebounds between 9pm and midnight.
And people appeared to avoid air-conditioned department stores and shopping centres during the afternoon, Dr Karunanethy said.
"Department stores are not insulated from the climate effects even if they have air conditioning because people don't necessarily want to travel and go through the heat just to get to a department store," he said.
"I think that's a bit of a misconception that department stores are air-conditioned and so that's where people go."
Importance of a night-time economy
Dr Karunanethy said the findings showed cities that embraced longer retail opening hours and a more functional night-time economy to ease the harshness of weather such as heatwaves go on to experience a level of "climate resilience".
"It's sort of like [a] happy side benefit when cities pursue 24-hour economies … Cities and societies can temporally adapt [and] it actually contributes to the overall resiliency of the city in cushioning the economic impacts of climate change," he said.
"In a lot of regional cities and especially some capital cities, there's constraints on being able to trade beyond a certain time and on the weekends.
"The learning from this is that when a city is going through any climate event, losing those restrictions — even temporarily — is going to be super important. If [people] want to stock up the night before in anticipation of a climate event the next day, the shops have to be open."
The researchers say cities need to adapt to support consumer behaviour during heatwaves. (ABC News: Andrew O'Connor)
Despite that, Dr Karunanethy said there was evidence to show that cities were responding to the challenge.
"Extreme heat is rewriting the daily rhythm of our cities,"he said.
"Heatwaves, as they become increasingly prevalent, are shaping behaviour and driving people into different forms of antics … The question is: Is our city infrastructure up for that? Is it ready?"