| Abstract: |
Data on sales of memory modules are used to explore several aspects of
e-retail demand. There is a strong relationship between e-retail sales to a
given state and sales tax rates that apply to purchases from online retailers.
This suggests that there is substantial substitution between online and online
retail, and tax avoidance may be an important contributor to e-retail
activity. Geography matters in two ways: we find some evidence that consumers
prefer purchasing from firms in nearby states to benefit from faster shipping
times as well as evidence of a separate preference for buying from in-state
firms. Consumers appear fairly rational in some ways, but boundedly rational
in others. |