Transcript bea.gov Observations about Definition Question

Agenda item 9
Thoughts on the
e-commerce chapter
By Marshall Reinsdorf
for presentation at the
UNECE Group of Experts on National Accounts
April 28, 2010
Definition Question
 Definition of e-commerce is unsettled:
 Delivered to customer’s computer over a wire, or just
ordered using a computer or customized ordering software over a wire?
 What about just delivered over a wire, e.g. online advertising?
 Just over internet, or over any kind of network?
 Can be classified into B-to-B, B-to-C, and C-to-C.
 Estimates vary a lot depending on definition chosen by researcher.
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Economic Rationale
 Lower transactions cost.
 Increased competition (all the gains may go to consumers).
 Allows reorganization/rationalization of the production
process.
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Data Challenges
 Underestimation of trade flows likely worsened by growth of
small-valued transactions and by appearance of new kinds of
trade in services.
 We may not be surveying the right firms or asking the right
questions of those we do survey (or of surveyed households).
 Measures of retail expenditures may include exports or miss
imports. (Note that unmeasured consumption and imports of
online music do NOT distort measurement of GDP.)
 Scope of CPI price surveys and outlet substitution bias.
 How to measure/handle C-to-C commerce.
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Observations about Definition Question
 What types of questions are various definitions best suited for?
 Advantages/disadvantages of broad and narrow approaches?
 More explicit discussion of international vs domestic e-commerce
would be helpful: hard to know when the topic is just trade.
 Greatest interest is in e-delivery definition and newly tradable
services.
 Include advice about survey design (e.g. respondents may report
communications service as trade in deliverables, or vice versa.)
 Reminders of applicable general principles of measurement of
trade in services need more prominence.
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Observation about Economic Rationale
 Increased range of varieties available for final (or
intermediate) consumption is another critical benefit.
 Reorganization of production often takes a long time to fully
play out. Includes growth of within-firm specialization or
centralization, increased outsourcing/offshoring of some
kinds of activities, better supply chain/inventory
management, and fragmentation of the production process.
 What are implications of this for measuring economic growth
or productivity growth?
 Possible effects of new kinds of trade in services on
employment: how many jobs are offshorable?
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Observations about Measurement Challenges
 Need to consider how to change surveys, questions and data
collection methods to capture small value transactions and
new kinds of transactions.
 Are our classification systems flexible enough and
completeenough to keep up with new kinds of trade made
possible by e-commerce?
 Do profits on C-to-C commerce belong in GDP/GDI?
 Inclusion of C-to-C imports in consumption, and C-to-C
exports in change-in-inventories.
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