Why Online Retail Sales are Much Larger than US Census Data Report

39 Pages Posted: 18 Jan 2016 Last revised: 9 Feb 2016

See all articles by David S. Evans

David S. Evans

Global Economics Group; University College London

Scott Murray

Market Platform Dynamics

Richard Schmalensee

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: February 7, 2016

Abstract

Based on the publicly available information on the data sources and methodology used by the Census Bureau to estimate e-commerce and physical retail sales, and based on detailed e-mail communications with the Census official responsible for the retail trade data, we found, in a version of this paper released on January 28, 2016, that the Census Bureau significantly undercounted online retail sales; we also provided what we believed were conservative estimates of the undercount. The Census Bureau has subsequently “corrected” the e-mail communications from the Census official and informed us that they follow different procedures and report different figures than we, and we believe any reasonable researcher, would have surmised. Assuming that Census does what they now say they do, we still believe that the Census Bureau undercounts online retail sales but it is not possible to verify that this the case or provide an estimate of the magnitude. We make several recommendation for the Census Bureau in light of our research, and our experience trying to validate their data, including that the Census Bureau commission an independent audit of the calculations of its e-commerce data for retail trade.

Keywords: Internet economy, e-commerce, Census retail data, retail, online sales, online retail, digital commerce, retail reinvention

JEL Classification: L10, L11, L22, L81, L86, M21, N82, Y1

Suggested Citation

Evans, David S. and Murray, Scott and Schmalensee, Richard, Why Online Retail Sales are Much Larger than US Census Data Report (February 7, 2016). Available at SSRN: https://ssrn.com/abstract=2716266 or http://dx.doi.org/10.2139/ssrn.2716266

David S. Evans (Contact Author)

Global Economics Group ( email )

111 Devonshire St.
Suite 900
Boston, MA 02108
United States

University College London ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Scott Murray

Market Platform Dynamics ( email )

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Suite 400
Chicago, IL 60603
United States

Richard Schmalensee

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

Room E62-525
Cambridge, MA 02142
United States
617-253-2957 (Phone)
617-258-6617 (Fax)

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