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Abstract
AbstractTraditional shopping trips in the real world induce social costs of travelling whereas shopping trips in the virtual world trigger transport costs when non‐digital goods are delivered in the real world. Taking into consideration that not only the goods bought create utility but also shopping trips, it is asked whether a differentiated sales tax could be justified as an incomplete remedy for the social costs of travelling and transport when a fuel tax is not available. Employing a ‘shopping trips’ model based on the analysis of Anas' (2007) article “A unified theory of consumption, travel and trip chaining”, the consumer's decision to shop offline or online is investigated. It is shown that a fuel tax may actually internalize the variable social costs of travelling and transport. As an alternative to a fuel tax, it is analyzed whether a differentiated sales tax could also internalize at least some of the externalities. Although this seems possible it is unclear whether the benefits of such a tax rate differentiation are worth the implied hidden costs relating to distributional and fairness goals of public policy.
Published Version
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