Tax Sensitivity and Home State Preferences in Internet Purchasing

Glenn Ellison () and Sara Fisher Ellison

American Economic Journal: Economic Policy, 2009, vol. 1, issue 2, 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)

JEL-codes: D12 H25 H71 L81 (search for similar items in EconPapers)
Date: 2009
Note: DOI: 10.1257/pol.1.2.53
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Citations: View citations in EconPapers (50)

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