Abstract

http://ssrn.com/abstract=319701
 
 

References (32)



 
 

Citations (44)



 


 



Measuring Prices and Price Competition Online: Amazon and Barnes and Noble


Austan Goolsbee


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Judith A. Chevalier


Yale School of Management; National Bureau of Economic Research (NBER)

June 2002

Yale ICF Working Paper No. 02-23

Abstract:     
Despite the interest in measuring price sensitivity of online consumers, most academic work on Internet commerce is hindered by a lack of data on quality. In this paper we use publicly available data on the sales ranks of about 20,000 books to derive quantity proxies at the two leading online booksellers. Matching this information to prices, we can directly estimate the elasticities of demand facing both merchants as well as create a consumer price index for online books. The results show significant price sensitivity at both merchants but demand at Barnes and Noble is much more price-elastic than is demand at Amazon. The data also allows us to estimate the magnitude of retail outlet substitution bias in the CPI due to the rise of Internet sales. The estimates suggest that prices online are much more variable than the CPI, which understates inflation by more than double in one period and gets the sign wrong in another.

Number of Pages in PDF File: 27

JEL Classification: L13, L81

working papers series





Download This Paper

Date posted: August 1, 2002  

Suggested Citation

Goolsbee, Austan and Chevalier, Judith A., Measuring Prices and Price Competition Online: Amazon and Barnes and Noble (June 2002). Yale ICF Working Paper No. 02-23. Available at SSRN: http://ssrn.com/abstract=319701 or http://dx.doi.org/10.2139/ssrn.319701

Contact Information

Austan Goolsbee
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-5869 (Phone)
773-702-0458 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Judith A. Chevalier (Contact Author)
Yale School of Management ( email )
135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 11,874
Downloads: 1,670
Download Rank: 4,665
References:  32
Citations:  44

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.281 seconds