How Sales Taxes Affect Customer and Firm Behavior: The Role of Search on the Internet

When a multichannel retailer opens its first retail store in a state, the firm is obligated to collect sales taxes on all Internet and catalog orders shipped to that state. This article assesses how opening a store affects Internet and catalog demand. The authors analyze purchase behavior among customers who live far from the retail store but must now pay sales taxes on catalog and Internet purchases. A comparable group of customers in a neighboring state serves as a control. The results show that Internet sales decrease significantly, but catalog sales are unaffected. Further investigation indicates that the difference in these outcomes is partly attributable to the ease with which customers can search for lower prices at competing retailers. The authors extend the analysis to a panel of multichannel firms and show that retailers that earn a large proportion of their revenue from direct channels avoid opening a first store in high-tax states. They conclude that current U.S. sales taxes laws have significant effects on both customer and firm behavior

Urban space and the social control of incivilities: perceptions of space influencing the regulationof anti-social behaviour

Contemporary cities are increasingly governed through space. In this article,we examine how urban space and perceptions thereof can influence the social control inthe area of incivilities. To this end, we first inspect the existing literature, in particularthe socio-spatial studies that emphasise the importance of culture and values in theinteraction with social control. Partly drawing on examples from our previous studies,we suggest that people’s perceptions of urban space (influenced by cultural symbols,social and media representations, aesthetics and other values) affect their perceptions ofincivilities, while the latter often determine or at least importantly contribute to theshaping of the social control of incivilities. We further highlight the role of gentrifica-tion as a medium and a tool of social control. The paper concludes by discussingimplications of this for the possible future, more integrated and interdisciplinaryresearch on the social control of incivilities in the city

The Option Value of Returns: Theory and Empirical Evidence

When a firm allows the return of previously purchased merchandise, it provides customers with an option that has measurable value. Whereas the option to return merchandise leads to an increase in gross revenue, it also creates additional costs. Selecting an optimal return policy requires balancing both demand and cost implications. In this paper, we develop a structural model of a consumer's decision to purchase and return an item that nests extant choice models as a special case. The model enables a firm to both measure the value to consumers of the return option and balance the costs and benefits of different return policies. We apply the model to a sample of data provided by a mail-order catalog company. We find considerable variation in the value of returns across customers and categories. When the option value is large, there are large increases in demand. For example, the option to return women's footwear is worth an average of more than $15 per purchase to customers and increases average purchase rates by more than 50%. We illustrate how the model can be used by a retailer to optimize his return policies across categories and customers.choice models, consumer behavior, decisions under uncertainty, direct marketing, e-commerce, econometric models, hierarchical Bayes analysis, latent variable models, marketing operations interface, service quality, targeting, returns