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

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.

Authors:

Néstor Duch-Brown, Bertin Martens