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Working from Home and Consumption in Cities

Author

Listed:
  • Jean-Victor Alipour
  • Oliver Falck
  • Simon Krause
  • Carla Krolage
  • Sebastian Wichert

Abstract

We estimate the impact of the Covid-induced shift to working from home (WFH) on offline consumer spending within 50 German metropolitan areas (MAs). We build a postcode-level panel (2019–2023) of cellphone mobility patterns and local card transaction volumes. The identifying variation comes from local differences in WFH potential: the fraction of residents with a teleworkable job. Difference-in-differences estimates show that higher WFH potential is associated with persistent morning-mobility declines and spending increases. We estimate an elasticity of spending with respect to WFH-induced mobility changes of -3.7%, driven by large MAs. Neither firm turnover nor WFH-induced migration can explain the results.

Suggested Citation

  • Jean-Victor Alipour & Oliver Falck & Simon Krause & Carla Krolage & Sebastian Wichert, 2022. "Working from Home and Consumption in Cities," CESifo Working Paper Series 10000, CESifo.
    • Handle: RePEc:ces:ceswps:_10000
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    References listed on IDEAS

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    1. Bamieh, Omar & Ziegler, Lennart, 2022. "Are remote work options the new standard? Evidence from vacancy postings during the COVID-19 crisis," Labour Economics, Elsevier, vol. 76(C).
    2. Jean-Victor Alipour & Christina Langer & Layla O´Kane, 2021. "Is Working from Home Here to Stay? A Look at 35 Million Job Ads," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 22(06), pages 41-46, November.
    3. Barrero, Jose Maria & Bloom, Nick & Davis, Steven J., 2020. "Why Working From Home Will Stick," SocArXiv wfdbe, Center for Open Science.
    4. Liu, Sitian & Su, Yichen, 2021. "The impact of the COVID-19 pandemic on the demand for density: Evidence from the U.S. housing market," Economics Letters, Elsevier, vol. 207(C).
    5. Cevat Giray Aksoy & Jose Maria Barrero & Nicholas Bloom & Steven J. Davis & Mathias Dolls & Pablo Zarate, 2022. "Working from Home Around the World," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 53(2 (Fall)), pages 281-360.
    6. Arjun Ramani & Nicholas Bloom, 2021. "The Donut Effect of Covid-19 on Cities," NBER Working Papers 28876, National Bureau of Economic Research, Inc.
    7. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2020. "Inequality in the impact of the coronavirus shock: Evidence from real time surveys," Journal of Public Economics, Elsevier, vol. 189(C).
    8. Joel Alcedo & Alberto Cavallo & Bricklin Dwyer & Prachi Mishra & Antonio Spilimbergo, 2022. "Back to Trend: COVID Effects on E-commerce in 47 Countries," NBER Working Papers 29729, National Bureau of Economic Research, Inc.
    9. Alipour, Jean-Victor & Falck, Oliver & Schüller, Simone, 2020. "Germany's Capacities to Work from Home," IZA Discussion Papers 13152, Institute of Labor Economics (IZA).
    10. Alipour, Jean-Victor & Falck, Oliver & Schüller, Simone, 2023. "Germany’s capacity to work from home," European Economic Review, Elsevier, vol. 151(C).
    11. Delventhal, Matthew J. & Kwon, Eunjee & Parkhomenko, Andrii, 2022. "JUE Insight: How do cities change when we work from home?," Journal of Urban Economics, Elsevier, vol. 127(C).
    12. Jean-Victor Alipour & Christina Langerand & Layla O’Kane, 2021. "Is Working from Home Here to Stay? A Look at 35 Million Job Ads," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 22(06), pages 44-46, November.
    13. Haiqiang Chen & Wenlan Qian & Qiang Wen, 2021. "The Impact of the COVID-19 Pandemic on Consumption: Learning from High-Frequency Transaction Data," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 307-311, May.
    14. Alcedo, Joel & Cavallo, Alberto & Dwyer, Bricklin & Mishra, Prachi & Spilimbergo, Antonio, 2022. "E-commerce During Covid: Stylized Facts from 47 Economies," CEPR Discussion Papers 17001, C.E.P.R. Discussion Papers.
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    Citations

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    Cited by:

    1. Jan Bruha & Hana Bruhova Foltynova, 2023. "Long-Term Impacts of the COVID-19 Pandemic on Working from Home and Online Shopping: Evidence from a Czech Panel Survey," Working Papers 2023/9, Czech National Bank.
    2. Silke Hamann & Annekatrin Niebuhr & Duncan Roth & Georg Sieglen, 2023. "How does the Covid‐19 pandemic affect regional labor markets and why do large cities suffer most?," Journal of Regional Science, Wiley Blackwell, vol. 63(5), pages 1228-1250, November.
    3. Simon Krause & Andreas Trumpp & Tobias Dichtl & Susanne Kiese & Alexander Rutsch, 2024. "The Impact of Working from Home on the German Office Real Estate Market," EconPol Forum, CESifo, vol. 25(05), pages 52-58, September.
    4. Lee, Kangoh, 2023. "Working from home as an economic and social change: A review," Labour Economics, Elsevier, vol. 85(C).

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    More about this item

    Keywords

    remote work; consumer spending; urban agglomerations; cities; spatial analysis; cellphone mobility;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • J00 - Labor and Demographic Economics - - General - - - General

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