Consumer Benefits from the EU Digital Single Market: Evidence from Household Appliances Markets

Institute for Prospective Technological Studies Digital Economy Working Paper No. 2014/03

30 Pages Posted: 8 Jun 2014

See all articles by Néstor Duch-Brown

Néstor Duch-Brown

Joint Research Centre - European Commission

Bertin Martens

Tilburg Law and Economics Center (TILEC); Bruegel

Date Written: June 6, 2014

Abstract

This paper investigates price differences between online and offline retail channels in the EU Digital Single Market. Using price and sales data for ten household appliances product categories sold both offline and online in 21 EU countries in 2009, and correcting for product characteristics, we find evidence that online prices and price dispersion are lower than offline. Online demand is more price-elastic. We compute consumers' welfare effects for different scenarios. E-commerce increases consumer surplus by €34 billion or 0.3% of EU-27 GDP. Full online price convergence across the EU towards the lowest observed average price would further increase welfare by 0.02% of GDP.

Keywords: price dispersion, e-commerce, consumer welfare, online trade, price effects

JEL Classification: L11; L15; L68

Suggested Citation

Duch-Brown, Néstor and Martens, Bertin, Consumer Benefits from the EU Digital Single Market: Evidence from Household Appliances Markets (June 6, 2014). Institute for Prospective Technological Studies Digital Economy Working Paper No. 2014/03 , Available at SSRN: https://ssrn.com/abstract=2446964 or http://dx.doi.org/10.2139/ssrn.2446964

Néstor Duch-Brown (Contact Author)

Joint Research Centre - European Commission ( email )

Edificio Expo, C
Inca Garcilaso, 3
Sevilla, E-41092
Spain

Bertin Martens

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Bruegel ( email )

Rue de la Charité 33
B-1210 Brussels Belgium, 1210
Belgium

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