The demand for teleshopping: An application of discrete choice models

New telecommunications technologies have often been suggested to act as substitutes for travel. Teleshopping may be a substitute for traditional store shopping. This paper studies the determination of the demand for teleshopping. In general, the demand for telecommunications is derived from the demand for information. So we look at teleshopping as a form of information gathering. Agents can engage in various shopping activities, including teleshopping, which entail different time and monetary costs. Through a discrete choice model, we analyze the effect of costs on the choice of shopping activities. The model is estimated based on a pilot experiment in which individuals had to choose among information bundles when shopping for differentiated products. Implicit in the choice set were information items which can only be transmitted by specific media. Limitations of this preliminary work and suggestions for future research are discussed.