This paper investigates if e-commerce influences the demand for brick and mortar retail real estate. The hypothesis is that e-commerce is reducing the demand for brick and mortar retail, causing firms to exit the market. Physical stores locate where the population and income levels provide the store with enough demand to make normal profits. This paper constructs a model to test number of retail establishments as a function of population, income, distance from a mall, and mall presence in that zip code. Mall presence and distance from mall are meant to represent agglomeration and hierarchy of goods, respectively. The model tests these variables in 2012 and 2015 in the Cleveland and Akron metropolitan areas. The results of the model were not statistically different from 2012 to 2015. The explanatory power and coefficient size of the traditional variables were not shown to decrease. Population, demand and agglomeration were significant predictors in both periods. The implication of this result is that during this period there is no evidence that e-commerce is influencing the demand for physical retail real estate.
Marousek, John, "The Relevance of Brick and Mortar Retail in the Age of E-Commerce" (2018). Senior Independent Study Theses. Paper 8064.
Bachelor of Arts
Senior Independent Study Thesis
© Copyright 2018 John Marousek