The Impact of Online Sales on Consumers and Firms: Evidence from Household Appliances

Nestor Duch-Brown (), Lukasz Grzybowski and Frank Verboven
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Nestor Duch-Brown: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Authors registered in the RePEc Author Service: Néstor Duch Brown

No 2015-15, JRC Working Papers on Digital Economy from Joint Research Centre

Abstract: In this paper, we estimate a differentiated products demand model to ask three questions regarding the introduction of e-commerce. First, we ask whether the online distribution channel has increased total sales, or only diverted sales from traditional channels. We find that there is some market expansion effect but also a considerable sales diversion. Second, we ask who benefited most from online sales: consumers or firms. We find that consumers benefited more, which is entirely due to the appearance of an additional distribution channel and not due to increased competition. Third, we ask how the online channel has affected European market integration. We find that international price differences for identical products are larger in the traditional channel than online. However, there is still substantial market segmentation in the online channel between the EU countries. The introduction of e-commerce therefore did not influence price levels and price dispersion in the traditional channel.

Keywords: e-commerce; online sales; substitution; consumer welfare; nested logit (search for similar items in EconPapers)
JEL-codes: L13 L68 L86 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2015
New Economics Papers: this item is included in nep-com, nep-eur and nep-ict
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ipt:decwpa:2015-15

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