DP12150 Consumer Mobility and the Local Structure of Consumption Industries
|Author(s):||Sumit Agarwal, J Bradford Jensen, Ferdinando Monte|
|Publication Date:||July 2017|
|Date Revised:||January 2020|
|JEL(s):||F1, F14, L8, R1, R2|
|Programme Areas:||International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=12150|
We study local employment, establishment density, and establishment size across industries delivering final consumption, which comprise a substantial fraction of production, shape local amenities, and pay different wages. In a stylized model of consumer mobility, lower industry storability/durability concentrates demand in space, increasing equilibrium employment. Credit card transactions data show that consumer mobility is limited and varies substantially across sectors; moreover, expenditure declines more rapidly with distance in sectors transacted more frequently. Lower storability/durability, proxied by average transaction frequency, increases a sector's local employment via higher establishment density. Variation in consumer mobility is as economically significant as consumers' expenditure shares.