The Impact of Socioeconomic and Cultural Differences on Online Trade
56 Pages Posted: 3 Sep 2019 Last revised: 30 Jan 2021
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The Impact of Socioeconomic and Cultural Differences on Online Trade
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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The Impact of Socioeconomic and Cultural Differences on Online Trade
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