E-commerce Statistics: Explanation and Sources

Publication Date: June 2003

Publisher: Library of Congress. Congressional Research Service


Research Area: Economics



The value of e-commerce transactions, while still small relative to the size of the U.S. economy, continues to show strong growth despite a recent economic downturn. Congress will play a vital role in many e-commerce policy issues, including Internet taxation, encryption and electronic authentication (i.e., digital signatures), intellectual property protection (i.e., patent or copyright infringement), computer network security, and privacy safeguards for individuals and organizations, as well as consideration of how European Union (EU) and World Trade Organization (WTO) policies may affect U.S. e-commerce activities

While e-commerce growth is widely discussed, until recently it had remained largely undefined and unrecognized in official economic statistics. Establishing relevant and consistent working definitions is a critical first step in developing useful measures for e-commerce. The Bureau of the Census initiated an aggressive program in 2000 to begin filling the e-commerce data gap. In addition, the Bureau of Economic Analysis (BEA) is involved in measuring the new economy. BEA is studying the impact of the digital economy, to determine whether these changes should be captured in gross domestic product (GDP) and other economic accounts estimates. In February 2002, the Economics and Statistics Administration (ESA) of the U.S. Department of Commerce released Digital Economy 2002, its fourth annual report on the impact of information technology on the structure and performance of the U.S. economy. Among other findings, the report concluded that while early observers thought online versions of businesses would replace their real-world "bricks and mortar" counterparts, nothing approaching this degree of transformation has occurred.

The Census Bureau, the BEA, and ESA face a number of obstacles to providing accurate forecasts of electronic commerce. These include categorizing retailers who appear, disappear, or change products with dizzying regularity. There are hurdles in collecting data from e-commerce companies and in projecting data from survey respondents so that it represents the entire universe of e-commerce spending.

Private consulting firms and research and polling firms that provide estimates of the impact of the Internet on consumers and business, such as Nielsen and Gallup have also entered the field, along with new types of companies, such as Forrester Research, Gartner Group, Jupiter Communications, International Data Corporation (IDC), and Nielsen/Net Ratings. There is much debate over which Web measurement company's methods are more accurate. The research firms disagree among themselves about sampling methods and panel selection, and differing methods of identifying and soliciting the survey participants result in different data interpretations.

This report addresses the complexities of measuring e-commerce growth and provides background information on government and private firms' methods for estimating it. This report will be updated periodically.