The Impact of E-Commerce on Relative Prices and Consumer Welfare

Yoon Jo (), Misaki Matsumura and David Weinstein

No 26506, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines the impact of e-commerce on pricing behavior and welfare. Using Japanese data, we find that the entry of e-commerce firms significantly raised the rate of intercity price convergence for goods sold intensively online, but not for other goods. E-commerce also lowered relative inflation rates for goods sold intensively online. We overcome data challenges using long data series and historical catalog sales as an instrument for e-commerce sales intensity. We estimate that reductions in price dispersion raised welfare by 0.3 percent. E-commerce also lowered variety-adjusted prices on average by 0.9 percent, and more in cities with highly educated populations.

JEL-codes: F14 L86 R32 (search for similar items in EconPapers)
Date: 2019-11
New Economics Papers: this item is included in nep-com, nep-ict and nep-pay
Note: ITI
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Citations: View citations in EconPapers (13)

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