• AEA in the news
  • September 8, 2017

The online price advantage

The prices consumers pay online are usually the same as what they would spend in a store.


Bloomberg Businessweek cited a paper that appeared in the January issue of the American Economic Review in a column about the price gap between goods sold online and in store. The paper by Alberto Cavallo used data from the Billion Prices Project to compare the prices that consumers pay for an item through a retailer’s website and in a brick and mortar location. Seven times out of ten, the price is the same, according to Cavallo’s paper. He told the AEA in January that the price similarity “online and offline suggests the transparency that the web is having.”