Tax Sensitivity and Home State Preferences in Internet Purchasing
Author(s)Ellison, Glenn; Ellison, Sara F.
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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.
DepartmentMassachusetts Institute of Technology. Department of Economics
American Economic Journal: Economic Policy
American Economic Association
Ellison, Glenn, and Sara Fisher Ellison. "Tax Sensitivity and Home State Preferences in Internet Purchasing." American Economic Journal: Economic Policy, 1(2)(2009): 53–71. © 2009 The American Economic Association.
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