The share of retail sales made via distance selling has increased steadily, driven by Internet sales. Meanwhile, a large body of research has been devoted to measuring the impact of online shopping on consumer prices. These studies are based primarily on microeconomic data and they reveal contrasting effects due to diverging microeconomic behaviours. This paper aims to use a macro-sector estimation to show how the price-decreasing effects of Internet shopping outweigh the price-increasing effects. In that purpose, we use French price index series and distance selling sales covering about 30 sectors, from 1990 to 2007. We find that downward effects dominate: the recent development of distance selling, due to the development of online selling, results in lower prices.
Askenazy, Philippe, Celerier, Claire and Irac, Delphine, Distance Selling, Internet and Price Dynamics (Vente a Distance, Internet
et Dynamique des Prix) (French) (July 1, 2010). Banque de France Working Paper No. 288. Available at SSRN: http://ssrn.com/abstract=1653872 or http://dx.doi.org/10.2139/ssrn.1653872