The Impact of Online Food Delivery Services on Restaurant Sales
Abstract/Contents
- Abstract
- The rapid growth of online food delivery services has disrupted the traditionally offline restaurant industry. This study presents empirical evidence on the crowding-out effects and market expansions induced by the staggered entry of online food delivery services. Difference-in-differences methodology reveals that 30-50 cents of every dollar spent on online food delivery services are incremental, while the rest is drawn away from brick-and-mortar sales. These findings are statistically significant at the zip code-level and are heterogeneous across different types of consumption, suggesting that convenience and pre-existing spending habits drive the level of substitution. Conducting analyses on a year-by-year basis suggests that there is an increasing level of cannibalization of brick-and-mortar restaurant sales. Back-of-the-envelope calculations show an increase in restaurants' revenues but a decrease in profitability.
Description
| Type of resource | text |
|---|---|
| Date created | May 14, 2020 |
Creators/Contributors
| Author | Collison, Jack |
|---|---|
| Primary advisor | Einav, Liran |
Subjects
| Subject | Department of Economics |
|---|---|
| Subject | e-commerce |
| Subject | online food delivery |
| Subject | sales cannibalization |
| Subject | market expansion |
| Genre | Thesis |
Bibliographic information
| Related item | |
|---|---|
| Location | https://purl.stanford.edu/gy164tb5261 |
Access conditions
- Use and reproduction
- User agrees that, where applicable, content will not be used to identify or to otherwise infringe the privacy or confidentiality rights of individuals. Content distributed via the Stanford Digital Repository may be subject to additional license and use restrictions applied by the depositor.
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
Preferred citation
- Preferred Citation
- Collison, Jack (2020). The Impact of Online Food Delivery Services on Restaurant Sales. Stanford Digital Repository. Available at: https://purl.stanford.edu/gy164tb5261
Collection
Stanford University, Department of Economics, Honors Theses
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- Contact
- jack10@alumni.stanford.edu
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