Adoption of E-Commerce by Individuals and Digital-Divide

Abstract

E-commerce penetration rates are distant among those groups of individuals with the lowest and the highest levels of online shopping adoption. This is an indicator of digital-divide, having negative effects in terms of untapped opportunities for people, companies, and the whole economy. Key socioeconomic and demographic determinants of adoption of e-commerce are explored, analyzing a dataset of 174,776 observations for the period 2008–2017 in Spain. The empirical analysis is based on a standard neoclassical utility maximization framework. Linear probability model, logistic regression, and Heckman’s sample selection correction model have been used. The results suggest that e-commerce adoption is positively related with being male, having higher levels of education, income and digital skills, being Spanish, and being employed; while being female, older, and belonging to a household of two or more members have negative effects. An interaction between digital skills and age has been introduced in the model, where high digital skills seem to have a positive influence, partly counteracting the lower odds for some age groups. Policy recommendations related to demand and supply measures are suggested to foster the adoption of e-commerce.