EBay's making us richer

By THIS IS MONEY
Updated: 04:35 EST, 11 August 2008

INTERNET auction sites such as eBay have boosted the average household's wealth by around £3,000, an economics consultancy claimed today.

More than 50,000 people are currently making money through online trading in the UK, and the sites could be the next big boost to consumers' wealth, according to a report by the Centre for Economics and Business Research.

It said the websites had increased the value of second hand goods by providing a mechanism for advertising them and maximising their sale price, and this had in turn boosted the value of items people had sitting around their homes.

Laura Phaff, one of the authors of the report, said: 'If people realise that they have sellable goods sitting in their cupboards, it ought to increase consumers' confidence just like any other unexpected boost to wealth - such as a building society demutualisation windfall.'

The group claimed the success of the websites was having a growing impact on the economy, with more than £4 billion of trading likely to be carried out on eBay this year, the equivalent of 1.3% of total retail sales.

As a result it said retail sales growth could be around 0.3% higher this year than the figure reported by Government statisticians, pushing the figure up from an expected 2.1% to 2.4%.

Mark Pragnell, managing director of CEBR, said: 'Auction websites have helped create efficient markets where previously they didn't work well or didn't even exist.

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'Auction sites are increasing competition, widening consumers' choice and helping keep down inflation - both online and on the high street.'