The Impact of Socioeconomic and Cultural Differences on Online Trade

56 Pages Posted: 3 Sep 2019

See all articles by Daniel W. Elfenbein

Daniel W. Elfenbein

Washington University in St. Louis - John M. Olin Business School

Raymond J. Fisman

National Bureau of Economic Research (NBER); Boston University

Brian McManus

University of North Carolina (UNC) at Chapel Hill - Department of Economics

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Date Written: August 2019

Abstract

We use U.S. eBay data to investigate how trade is influenced by differences in socioeconomic characteristics, tastes, and trust. States’ similarity in cultural characteristics (ethnicity, religious affiliations, and political behavior) is predictive of online trade; cultural similarity similarly predicts trade between finer (three-digit zip code) geographies. The culture-trade relationship is mediated in part by consumers’ tastes, and is stronger for transactions with sellers who lack extensive reputations or certification, suggesting that consumers infer seller trustworthiness from cultural similarity. There is no correlation between cultural similarity and buyer satisfaction, consistent with perceived differences in trustworthiness not being validated by actual transactions.

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Suggested Citation

Elfenbein, Daniel W. and Fisman, Raymond and McManus, Brian, The Impact of Socioeconomic and Cultural Differences on Online Trade (August 2019). NBER Working Paper No. w26197. Available at SSRN: https://ssrn.com/abstract=3446502

Daniel W. Elfenbein (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

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Raymond Fisman

National Bureau of Economic Research (NBER)

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Boston University ( email )

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Brian McManus

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

Chapel Hill, NC 27599
United States

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