Internet Retail Demand: Taxes, Geography, and Online-Offline Competition

36 Pages Posted: 25 May 2006 Last revised: 15 Dec 2022

See all articles by Glenn Ellison

Glenn Ellison

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Sara Fisher Ellison

Massachusetts Institute of Technology (MIT) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2006

Abstract

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 online retailers. This suggests that there is substantial substitution between online and online 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.

Suggested Citation

Ellison, Glenn David and Fisher Ellison, Sara, Internet Retail Demand: Taxes, Geography, and Online-Offline Competition (May 2006). NBER Working Paper No. w12242, Available at SSRN: https://ssrn.com/abstract=902594

Glenn David Ellison (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
Room E52-380B
Cambridge, MA 02142
United States
617-253-8702 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Sara Fisher Ellison

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
Room E52-262C
Cambridge, MA 02142
United States
617-253-3821 (Phone)
617-253-1330 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
59
Abstract Views
1,025
Rank
159,344
PlumX Metrics