How variables are allocated memory in Javascript?

It's actually a very interesting area of JavaScript, and there are at least two answers:

• An answer in terms of what the specification defines, and
• An answer in terms of what JavaScript engines actually do, which may be optimized (and often is)

In terms of the specification: JavaScript's way of handling local variables is quite different from the way C does it. When you call a function, amongst other things a lexical environment for that call is created, which has something called an environment record. To keep things simple, I'm going to refer to them both together as the "binding object" (there's a good reason they're separate in the specification, though; if you want to get deeper into it, set aside a few hours and read through the spec). The binding object contains bindings for the arguments to the function, all local variables declared in the function, and all functions declared within the function (along with a couple of other things). A binding is a combination of a name (like a) and the current value for the binding (along with a couple of flags we don't need to worry about here). An unqualified reference within the function (e.g., the foo in foo, but not the foo in obj.foo, which is qualified) is first checked against the binding object to see if it matches a binding on it; if it does, that binding is used. When a closure survives the function returning (which can happen for several reasons), the binding object for that function call is retained in memory because the closure has a reference to the binding object in place where it was created. So in specification terms, it's all about objects.