Date of Award

January 2015

Document Type


Degree Name

Master of Science (MS)


Economics & Finance

First Advisor

Prodosh Simlai


Consumer behavior is highly correlated with economic conditions. The American shopping mall, an innovation of the 1950’s was built as a retail hub for consumption and entertainment purposes. Utilizing a data set ranging from 1992 – 2014, this paper researches the rapid decline and disappearance of shopping malls. To account for the number of shopping malls that have failed, I use the seasonally adjusted quarterly sales of department stores. Regressions are completed using ordinary least square (OLS) methodology. Three economic and societal changes are studied in regards to the cause behind the decline. The rising income inequality gap, the short term effects of the 2008 recession, and the growth of e-commerce and internet (mobile) connectivity. Of these threats, the most significant cause behind the decline is the growth of e-commerce and the associated innovation of the internet and mobile phone usage. The rising income inequality gap, and the decreasing size of the middle class also offers explanation into the decline. The Gini coefficient is significantly inversely related to the sales of department stores. The least effective theory behind the decline is the Great Recession. The effects of the recession were experienced in every aspect of the economy, and department store sales declined as a results of declining purchasing power and disposable income.