JUE Insight: How do cities change when we work from home?

How would the shape of our cities change if there were a permanent increase in working from home? We study this question using a quantitative model of the Los Angeles metropolitan area featuring local agglomeration externalities and endogenous traffic congestion. We find three important effects: (1)...

Full description

Saved in:
Bibliographic Details
Published in:Journal of urban economics 2022-01, Vol.127, p.103331, Article 103331
Main Authors: Delventhal, Matthew J., Kwon, Eunjee, Parkhomenko, Andrii
Format: Article
Language:English
Subjects:
Commuting
COVID-19
Spatial equilibrium
Urban
Work at home
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:How would the shape of our cities change if there were a permanent increase in working from home? We study this question using a quantitative model of the Los Angeles metropolitan area featuring local agglomeration externalities and endogenous traffic congestion. We find three important effects: (1) Jobs move to the core of the city, while residents move to the periphery. (2) Traffic congestion eases and travel times drop. (3) Average real estate prices fall, with declines in core locations and increases in the periphery. Workers who are able to switch to telecommuting enjoy large welfare gains by saving commute time and moving to more affordable neighborhoods. Workers who continue to work on-site enjoy modest welfare gains due to lower commute times, improved access to jobs, and the fall in average real estate prices.
ISSN:0094-1190
1095-9068
DOI:10.1016/j.jue.2021.103331