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Assessing the Gains from E-Commerce

Author

Listed:
  • Paul Dolfen
  • Liran Einav
  • Peter J. Klenow
  • Benjamin Klopack
  • Jonathan D. Levin
  • Larry Levin
  • Wayne Best
Abstract
E-commerce represents a rapidly growing share of consumer spending in the United States. We use transactions-level data on credit and debit cards from Visa, Inc. between 2007 and 2017 to quantify the resulting consumer surplus. We estimate e-commerce reached 8 percent of consumption by 2017, yielding the equivalent of a 1 percent boost to their consumption, or over $1,000 per household per year. While some of the gains arose from avoiding travel costs to local merchants, most of the gains stemmed from substituting to merchants available online but not locally. Higher income consumers gained more, as did consumers in more densely populated counties.

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  • Paul Dolfen & Liran Einav & Peter J. Klenow & Benjamin Klopack & Jonathan D. Levin & Larry Levin & Wayne Best, 2023. "Assessing the Gains from E-Commerce," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(1), pages 342-370, January.
    • Handle: RePEc:aea:aejmac:v:15:y:2023:i:1:p:342-70
    DOI: 10.1257/mac.20210049
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    Cited by:

    1. Zhou Jiang & Maoxia Zeng & Mingming Shi, 2023. "E‐commerce and Consumption Inequality in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(5), pages 61-86, September.
    2. Ahmad, Saad & Riker, David, 2020. "Versatility and Specificity of PE Models for Trade Policy Analysis," Conference papers 333160, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Cong Peng, 2019. "Does e-commerce reduce traffic congestion? Evidence from Alibaba Single Day shopping event," CEP Discussion Papers dp1646, Centre for Economic Performance, LSE.
    4. Su, Tong & Tao, Yanyang & Wang, Jingyi, 2024. "FinTech adoption and the clustered development of rural e-commerce: Evidence from Taobao Village," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    5. Redding, Stephen & Nakajima, Kentaro & Miyauchi, Yuhei, 2021. "Consumption access and agglomeration: evidence from smartphone data," LSE Research Online Documents on Economics 114353, London School of Economics and Political Science, LSE Library.
    6. Victor Couture & Cecile Gaubert & Jessie Handbury & Erik Hurst, 2019. "Income Growth and the Distributional Effects of Urban Spatial Sorting," NBER Working Papers 26142, National Bureau of Economic Research, Inc.
    7. Ikuto Aiba, 2024. "Information technology, market congestion, and economic geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 73(3), pages 1269-1295, October.
    8. Leonard I. Nakamura, 2020. "Evidence of Accelerating Mismeasurement of Growth and Inflation in the U.S. in the 21st Century," Working Papers 20-41, Federal Reserve Bank of Philadelphia.
    9. Yoon J. Jo & Misaki Matsumura & David E. Weinstein, 2019. "The Impact of E-Commerce on Relative Prices and Consumer Welfare," NBER Working Papers 26506, National Bureau of Economic Research, Inc.
    10. Chun, Hyunbae & Joo, Hailey Hayeon & Kang, Jisoo & Lee, Yoonsoo, 2023. "E-commerce and local labor markets: Is the “Retail Apocalypse” near?," Journal of Urban Economics, Elsevier, vol. 137(C).
    11. Chun, Hyunbae & Kwon, Eunjee & Yang, Dongyun, 2024. "The rise of e-commerce and generational consumption inequality: Evidence from COVID-19 in South Korea," Regional Science and Urban Economics, Elsevier, vol. 104(C).
    12. Santitarn Sathirathai & Voraprapa Nakavachara, 2019. "Connecting Locals to Locals: Market Discovery through E-Commerce," PIER Discussion Papers 118, Puey Ungphakorn Institute for Economic Research.
    13. Barbara Baarsma & Jesse Groenewegen, 2021. "COVID-19 and the Demand for Online Grocery Shopping: Empirical Evidence from the Netherlands," De Economist, Springer, vol. 169(4), pages 407-421, November.
    14. Jeremie Banet & Lucie Lebeau, 2022. "Central Bank Digital Currency: Financial Inclusion vs. Disintermediation," Working Papers 2218, Federal Reserve Bank of Dallas.
    15. Mr. Tidiane Kinda, 2019. "E-commerce as a Potential New Engine for Growth in Asia," IMF Working Papers 2019/135, International Monetary Fund.
    16. David Bounie & Youssouf Camara & John W. Galbraith, 2021. "Consumer Mobility, Online and On-site Commerce and the Geographic Concentration of Economic Activity: Evidence from 20 Billion Transactions," CIRANO Working Papers 2021s-17, CIRANO.
    17. Yufeng Huang & Bart J. Bronnenberg, 2023. "Consumer Transportation Costs and the Value of E-Commerce: Evidence from the Dutch Apparel Industry," Marketing Science, INFORMS, vol. 42(5), pages 984-1003, September.
    18. Gao, Jing & Zeng, Yiwu & Liu, Min, 2024. "Policy interventions and market innovation in rural China: Empirical evidence from Taobao villages," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1411-1429.
    19. Sunita Dhote & Chandan Vichoray & Rupesh Pais & S. Baskar & P. Mohamed Shakeel, 2020. "Hybrid geometric sampling and AdaBoost based deep learning approach for data imbalance in E-commerce," Electronic Commerce Research, Springer, vol. 20(2), pages 259-274, June.
    20. Volpe Martincus, Christian & Sztajerowska, Monika & Santi, Mariana Belén, 2024. "Consumers and Firms in International Trade," IDB Publications (Working Papers) 13558, Inter-American Development Bank.
    21. Peng, Cong, 2019. "Does e-commerce reduce traffic congestion? Evidence from Alibaba Single Day shopping event," LSE Research Online Documents on Economics 103411, London School of Economics and Political Science, LSE Library.
    22. Chung, Jamie, 2023. "The spillover effect of E-commerce on local retail real estate markets," Regional Science and Urban Economics, Elsevier, vol. 101(C).
    23. David Bounie & Youssouf Camara & John Galbraith, 2020. "Online Commerce, Inter-Regional Retail Trade, and the Evolution of Gravity Effects: Evidence from 20 Billion Transactions," Working Papers hal-02864695, HAL.

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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