Electronic commerce sales' response to gasoline price Online publication date: Thu, 09-Jan-2014
by Harri Ramcharran
International Journal of Electronic Finance (IJEF), Vol. 7, No. 3/4, 2013
Abstract: This research incorporates the economic aspect consumer behaviour to analyse the impact of gasoline price on e-commerce retail sales. We posit that gasoline price reflects the opportunity cost (monetary and time savings) of doing online transactions; also the other independent variable, real income, characterises consumers' propensity for internet shopping. The econometric results, based on quarterly data from 1999 Q4 to 2010 Q3, indicate the significance of both independent variables. The gasoline price elasticity supports the behavioural hypothesis that high transport costs motivate online shopping; also the high sales (income) elasticity indicates the pro-cyclical characteristics of e-commerce retail sales. Stationarity and cointegration of the variables attest to the reliability of the results and the usefulness of the model for forecasting. The implications of the results are important; slow economic growth and volatile gasoline prices could create uncertainty in the growth of e-commerce sales; this could impact business planning for expenditures on information technology.
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