Economic significance of p2p transactions

• Author: Pierre Hausemer - Julia Rzepecka - Marius Dragulin - Simone Vitiello - Lison Rabuel - Madalina Nunu - Adriana Rodriguez Diaz - Emma Psaila - Sara Fiorentini - Sara Gysen - Tim Meeusen - Simon Quaschning - Allison Dunne - Vadim Grinevich - Franz Huber - Linda Baines
• Pages: 78-104

Exploratory study of consumer issues in online peer-to-peer platform markets –

Task 1 Report

78

4 Economic significance of P2P transactions

This section addresses one of the two main objectives of this study, as described in

sub-section 2.1, which is to estimate the economic significance of P2P transactions

in the EU. In doing so, it complements current academic and policy literature (see

sub-section 3.6) that used different methods to achieve the same objective.

As made clear in the terms of reference of the study, the aim of this section is not

to provide a full economic assessment and analysis of P2P markets (volume, value,

growth potential, impact on traditional industries/services) or an economic impact

analysis. Nevertheless, based on data from this Task’s desk research as well as

Task 2 survey data, it is possible to estimate the size of the five P2P markets

considered.

To reach its objective in a clear and concise manner, this section is divided as

follows: sub-section 5.1 provides the methodology and limitations of the economic

modelling used in this study. Sub-section 0 maps the development of P2P platforms

in the EU28 and Norway over time. The sub—section also evaluates the popularity

and financial standing of platforms. The economic modelling starts with sub-section

5.3, which identifies peer participation rates, while describing the popularity of the

platforms in the sample. Sub-section 0 is the core of the economic model, and

estimates the total peer expenditure, peer revenues and non-peer revenues in P2P

transactions in the EU. Sub-section 0 summarises the results.

4.1 Methodology to estimate economic importance

The EU-level estimates of peer expenditure and peer revenues are calculated on the

basis of the Task 2 consumer survey run in 10 MS by sector of activity. The survey

targeted consumers; respondents were not asked to declare if they were

professional and non-professional peer providers.

The method for estimating total expenditure and revenue used in this

study relies on the median peer expenditure/revenue in each of the five

economic sectors considered. This is because the data point values on expenditure

and revenues in the survey sample vary significantly. In the case of such skewed

distributions the median value is a better measure of the overall tendency than the

mean. The median represents the value that splits the sample into two equal

halves: 50% of peer consumers spend less than the median and 50% of peer

consumers spend more than the median. Thus, the median provides a more

conservative estimate of the results.

The average and median values indicated in this report refer to total

revenues/expenditures per sector by active users over the past 12 months. They do

not distinguish between expenditure on individual platforms.

For each economic sector, the total peer expenditure is calculated using the

following formula. The same formula is applied for peer revenues:

      

  



 SEC(Exptotal) = the total peer expenditure in the given sector;

Exploratory study of consumer issues in online peer-to-peer platform markets –

Task 1 Report

79

 MS(Intusers) = the total number of internet users in the EU, based on the

EUROSTAT data taken from the European Commission’s (2015) Digital

Single Market report;

 Exppeer = the median peer expenditure recorded in the 10 MS in which the

survey ran;

 Tot(P2Pusers) = the percentage of total active respondents engaged in P2P

transactions, based on the 10 MS in which the survey ran. The percentage is

65.41%;

 SEC(P2Pconsumers) = the percentage of peer consumers in each sector under

study, out of the total number of active users of P2P platforms

(Tot(P2Pusers)).

The EU-level estimate for total peer expenditure is compiled by summing up each

sector’s estimated peer expenditure. The same approach is carried out for

estimating the EU-level total peer revenues.

Box 4: Methodological limitations

There are several limitations with the models used to calculate economic significance of P2P markets.

First, the values indicated in this section are estimates based on th e consumer survey conducted in

10 MS on internet users age 18 and above as part of this study. The results recorded in the 10 MS

have been extrapolated to the EU as a whole. The selection of 10 EU MS includes six EU MS where

P2P transactions have reached a certain critical mass, and/or where relevant research has been or is

being conducted170. In addition, four additional EU MS171 were chosen given their high potential for

collaborative economy initiatives172 and avai lable international surveys173 on the topic. Note that

internet penetration in four of the MS (Italy, Spain, Bulgaria and Poland) is lower than the EU average

(44%, 56%, 53% and 57%, respectively). The extrapolation is likely to lead to a loss of accuracy for

the EU-level estimate.

Second, only EU citizens aged 18 or over were considered for estimating the EU population, and EU

citizens aged 16-74 for the incidence of internet use. The statistics were derived from EUROSTAT and

the European Commission’s (2015) Digital Single Market report. However, even though mos t

platforms do not allow it, peers younger than 16 (or 18, depending on the platform ) could be actively

engaged in P2P transactions174. This study does not account for them.

Third, this study relies on median, rather than average values for peer re venues and peer

expenditure to calculate a EU-level estimate for peer revenues and expenditure. The median was

chosen due to the large skewedness in the sample distribution f or both peer revenues and peer

expenditure, and in line with the methodology adopted by previous studies in the field. Even though,

as per best practices, the median is the most adequa te measurement of a typical peer’s expenditure

or revenue, the extrapolation of this estimate at EU-level has the potential to diminish the data

reliability.

Fourth, this study interprets as “peer expenditure” and “peer revenue” what respondents reported to

have spent or received via a specific platform over the preceding 12 month period as the total

expenditure/revenue attributable to peers in one of each of the five markets under study. An

alternative calculation could have been to interpret peer expenditure/revenue as the average or

170 Netherlands, UK, Denmark, Spain, France, Germany

171 Bulgaria, Italy, Poland, Slovenia

172 According to The Nielsen Global Survey of Share Communities (2014). The study was conducted between August 14 and September 6,

2013, and polled more than 30,000 on-line consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East,

Africa and North America.

173 ING International Survey (2015). What’s mine is yours – for a price. This survey was conducted between 16 January and 2 February

2015 using internet-based polling. In total 15 countries (Austria, Belgium, Czech Republic, France, Germany, Italy, Luxembourg,

Netherlands, Poland, Romania, Spain, United Kingdom plus Turkey, USA and Australia) were polled with a total sample size of 14,829.

174 http://blog.mila.com/en/2015/06/12/why-the-on-demand-economy-will-continue-to-rise/