Abstract

http://ssrn.com/abstract=1413983
 
 

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Determinants of Recent Online Purchasing and the Percentage of Income Spent Online


Brendan Hannah


Colorado College - Department of Economics and Business

Kristina M. Lybecker


Colorado College - Department of Economics & Business

May 29, 2009

Colorado College Working Paper No. 2009-02

Abstract:     
The recent stagnation of electronic commerce highlights the need to understand contemporary online consumer behavior. This study incorporates current user demographics and emerging Internet activities to dynamically model the determinants of two key measurements of recent online shopping, a purchase within the last year and the novel dependent variable, percentage of income spent online in the last three months. Logistic regression is applied to a nationally representative 2007 survey of the U.S. online population. Determinants of a recent online purchase include, ownership of a credit card, an online payment account (PayPalTM), listening to podcasts, participating in online auctions, and for the first time, female gender. In a second regression, positive determinants for the percentage of income spent online include male gender, educational attainment, online auctions, instant messenging and online dating. Online spending increases with time online and appears to compete with other forms of online entertainment and social networking.

Stratification of the data by gender yields higher estimates for the explained variance in the percentage of income spent online for men than for women. Males are novelty shoppers, and online purchasing competes with watching television, playing games online and blogging. They strongly prefer products perceived as new and innovative and are not motivated by value. Further stratification by income and age reveals that possession of an online deferred account is the strongest determinant for all men except the highest earners. In contrast, women are convenience-oriented but not novelty or value shoppers. High-spending women are technologically sophisticated, using the Internet to obtain stock quotes, participate in online auctions and make deferred payments. These results produce snapshots of contemporary online shoppers that can be used by electronic retailers to determine which product characteristics to highlight for greatest impact, and to efficiently target specific activities, such as entertainment, podcast and social network websites, to develop new and robust marketing platforms.

Number of Pages in PDF File: 19

Keywords: online consumer behavior, online purchasing, online shopping, e-commerce, online marketing

JEL Classification: D12, D40, L81, L86, M30

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Date posted: June 4, 2009  

Suggested Citation

Hannah, Brendan and Lybecker, Kristina M., Determinants of Recent Online Purchasing and the Percentage of Income Spent Online (May 29, 2009). Colorado College Working Paper No. 2009-02. Available at SSRN: http://ssrn.com/abstract=1413983 or http://dx.doi.org/10.2139/ssrn.1413983

Contact Information

Brendan Hannah
Colorado College - Department of Economics and Business ( email )
14 E Cache La Poudre Street
Colorado Springs, CO 80903
United States
Kristina M. Lybecker (Contact Author)
Colorado College - Department of Economics & Business ( email )
14 E Cache La Poudre Street
Colorado Springs, CO 80903
United States
719-389-6445 (Phone)
719-389-6927 (Fax)
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