The Impact of Distance in Retail Markets
AEA Papers and Proceedings
vol. 113,
May 2023
(pp. 229-33)
Abstract
We examine the demand-side implications of Amazon's distribution and logistics investments. Our results indicate that online demand—transactions at Amazon and its competitors—does not respond to the consumer's proximity to Amazon's upstream fulfillment distribution facilities, suggesting that their densification did not differentially improve local shipping times and on-time delivery. Instead, we find that investments in last-mile delivery facilities and services allow the company to improve shipping times more directly in the urban markets served by these facilities, simultaneously increasing demand through the rollout of same-day service options and reducing the visits to traditional brick-and-mortar retail.Citation
Edgel, Danny, Jean-François Houde, Peter Newberry, and Katja Seim. 2023. "The Impact of Distance in Retail Markets." AEA Papers and Proceedings, 113: 229-33. DOI: 10.1257/pandp.20231066Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D22 Firm Behavior: Empirical Analysis
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
- L14 Transactional Relationships; Contracts and Reputation; Networks
- L81 Retail and Wholesale Trade; e-Commerce
- R22 Urban, Rural, Regional, Real Estate, and Transportation Economics: Other Demand