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E-commerce, delivery drones and their impact on cities

Author

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  • Straubinger, Anna
  • de Groot, Henri L.F.
  • Verhoef, Erik T.

Abstract

E-commerce has gained importance over the last years and the COVID-19 pandemic has further strengthened this development. With the increasing opportunities that novel transport technologies such as cargo drones offer, e-commerce is likely to even become more attractive in upcoming years. This paper therefore analyses the long-run effects of increasing importance of e-commerce and, more specifically, the impact of a shift towards package delivery via drones. Using a polycentric urban spatial general equilibrium model that incorporates the different retail channels, we model the consumer’s choice between local and online shopping. In the case of online shopping, delivery takes place either via drone or via truck. Due to the equilibrium mechanisms, changes in shopping behavior potentially result in different home and work location choices or labor supply choices. The model thus allows assessing the long-run effects of e-commerce and drone delivery, also on related markets such as the markets for land, labor and goods. A numerical simulation of the model shows that each additional retail channel adds welfare and that changes in the shopping channels result in changes in location choices of households and companies.

Suggested Citation

  • Straubinger, Anna & de Groot, Henri L.F. & Verhoef, Erik T., 2023. "E-commerce, delivery drones and their impact on cities," Transportation Research Part A: Policy and Practice, Elsevier, vol. 178(C).
    • Handle: RePEc:eee:transa:v:178:y:2023:i:c:s0965856423002616
    DOI: 10.1016/j.tra.2023.103841
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    References listed on IDEAS

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    1. Niu, Baozhuang & Zhang, Jianhua & Xie, Fengfeng, 2024. "Drone logistics’ resilient development: impacts of consumer choice, competition, and regulation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 185(C).

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    More about this item

    Keywords

    Cargo drones; E-commerce; Spatial equilibrium; Welfare effects; Agglomeration effects;
    All these keywords.

    JEL classification:

    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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