Internet retail demand
Subtitle: taxes, geography, and online-offline competition
By: Glenn Ellison [and] Sara Ellison
Contributors: Ellison, Sara Fisher; Massachusetts Institute of Technology. Dept. of Economics
Series: Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 06-14; Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 06-14.
Publisher: Massachusetts Institute of Technology, Dept. of Economics
Published: 2006
Place of publication: Cambridge, MA
Language: eng
Number of pages: 34
Description: Data on sales of memory modules are used to explore several aspects of e-retail demand. There is a strong relationship between e-retail sales to a given state and sales tax rates that apply to purchases from offline retailers. This suggests that there is substantial substitution between online and offline retail and tax avoidance may be an important contributor to e-retail activity. Geography matters in two ways: we find some evidence that consumers prefer purchasing from firms in nearby states to benefit from faster shipping times as well as evidence of a separate preference for buying from in-state firms. Consumers appear fairly rational in some ways, but boundedly rational in others. Keywords: E commerce, internet taxation, discrete choice analysis. JEL Classifications: D12, H20, L81, R12.
Notes: "April 28, 2006."

Includes bibliographical references (p. 29-30).

Abstract in HTML and working paper for download in PDF available via World Wide Web at the Social Science Research Network.