Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Tuesday, September 7, 2010

Distance Selling, Internet and Price Dynamics

Posted by D. Daniel Sokol

Philippe Askenazy, Paris School of Economics; Institute for the Study of Labor (IZA), Claire Celerier, Banque de France; University of Toulouse 1 - Toulouse School of Economics, and Delphine Irac, Banque de France discuss Distance Selling, Internet and Price Dynamics.

ABSTRACT: The share of retail sales made via distance selling has increased steadily, driven by Internet sales. Meanwhile, a large body of research has been devoted to measuring the impact of online shopping on consumer prices. These studies are based primarily on microeconomic data and they reveal contrasting effects due to diverging microeconomic behaviours. This paper aims to use a macro-sector estimation to show how the price-decreasing effects of Internet shopping outweigh the price-increasing effects. In that purpose, we use French price index series and distance selling sales covering about 30 sectors, from 1990 to 2007. We find that downward effects dominate: the recent development of distance selling, due to the development of online selling, results in lower prices.

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