Abstract

http://ssrn.com/abstract=2422403
 


 



The 'Amazon Tax': Empirical Evidence from Amazon and Main Street Retailers


Brian Baugh


Ohio State University (OSU) - Fisher College of Business

Itzhak Ben-David


Ohio State University - Fisher College of Business, Finance Department; National Bureau of Economic Research (NBER)

Hoonsuk Park


Ohio State University (OSU) - Fisher College of Business

April 8, 2014

Charles A. Dice Center Working Paper No. 2014-05
Fisher College of Business Working Paper No. 2014-03-05

Abstract:     
Several states have recently implemented laws requiring the collection of sales tax on online purchases. In practice, however, only Amazon has been affected. We find that households living in these states reduce Amazon expenditures by 9.5%, implying an elasticity of -1.3. We find the effect to be more pronounced for large purchases, for which we estimate an elasticity of -3.2. Further, we find that the decline in Amazon purchases is offset by a 2.0% increase in purchases at local brick-and-mortar retailers and a 19.8% increase in purchases at the online operations of competing retailers.

Number of Pages in PDF File: 42

Keywords: Amazon, price elasticity, tax, Internet commerce, substitution, price rigidity, elasticity, brick-and-mortar, households, online, natural experiment, commerce, competition, retail, Marketplace, public policy, household finance, search costs, state budget, state deficit

JEL Classification: D12, D40, L51

working papers series





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Date posted: April 10, 2014 ; Last revised: October 3, 2014

Suggested Citation

Baugh, Brian and Ben-David, Itzhak and Park, Hoonsuk, The 'Amazon Tax': Empirical Evidence from Amazon and Main Street Retailers (April 8, 2014). Charles A. Dice Center Working Paper No. 2014-05; Fisher College of Business Working Paper No. 2014-03-05. Available at SSRN: http://ssrn.com/abstract=2422403 or http://dx.doi.org/10.2139/ssrn.2422403

Contact Information

Brian Baugh
Ohio State University (OSU) - Fisher College of Business ( email )
2100 Neil Avenue
Columbus, OH 43210-1144
United States

Itzhak Ben-David (Contact Author)
Ohio State University - Fisher College of Business, Finance Department ( email )
2100 Neil Avenue
Fisher 700D
Columbus, OH 43210-1144
United States
773 988 1353 (Phone)
HOME PAGE: http://fisher.osu.edu/fin/faculty/Ben-David/index.htm

National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
HOME PAGE: http://fisher.osu.edu/fin/faculty/Ben-David/
Hoonsuk Park
Ohio State University (OSU) - Fisher College of Business ( email )
2100 Neil Avenue
Columbus, OH 43210-1144
United States
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