American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Tax Sensitivity and Home State Preferences in Internet Purchasing
American Economic Journal: Economic Policy
(pp. 53–71)
Abstract
Data on memory modules sales are used to explore aspects of e-retail demand. Aggregate sales are examined in state-level regressions. Discrete choice techniques are used to examine (incomplete) hourly sales data from a price comparison site. We find a strong relationship between e-retail sales to a given state and sales tax rates that apply to purchases from offline retailers, suggesting substantial online-offline substitution and the importance of tax avoidance motives. Geography matters in two ways: consumers prefer purchasing from firms in nearby states and appear to have a separate preference for buying from in-state firms. (JEL D12, H25, H71, L81)Citation
Ellison, Glenn, and Sara Fisher Ellison. 2009. "Tax Sensitivity and Home State Preferences in Internet Purchasing." American Economic Journal: Economic Policy 1 (2): 53–71. DOI: 10.1257/pol.1.2.53Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- H25 Business Taxes and Subsidies including sales and value-added (VAT)
- H71 State and Local Taxation, Subsidies, and Revenue
- L81 Retail and Wholesale Trade; e-Commerce