On the effect of e-commerce’s spread on inflation

Jakub Mućk, Aneta Błażejowska, Karolina Łapszys and Karol Szafranek

Economics Letters, 2025, vol. 254, issue C

Abstract: Online purchasing has become a prevalent form of shopping in many economies, raising questions about its impact on price dynamics. We contribute to the literature by quantifying this effect. To this end, we employ unique data on the penetration of e-commerce transactions in retail trade and estimate a dynamic panel data model on annual data for 24 European economies and the US using a bootstrap-based bias-corrected framework. We document that rising popularity of e-commerce acts in a disinflationary manner – a 1% increase in the spread of online transactions in retail trade lowers headline and core inflation by roughly 0.03 pp and 0.02 pp on impact and by 0.05 pp and 0.04 pp over the long term. In cumulative terms, over the 2004–2024 period, rapid e-commerce expansion has lowered the overall price level across all economies by 10%, on average.

Keywords: Retail market; E-commerce; Inflation; Dynamic panel model; Bias-corrected estimation (search for similar items in EconPapers)
JEL-codes: C23 E31 L81 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176525003015
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:254:y:2025:i:c:s0165176525003015

DOI: 10.1016/j.econlet.2025.112464

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().