Consumer Mobility and the Local Structure of Consumption Industries

87 Pages Posted: 18 Jul 2017 Last revised: 10 Feb 2020

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

J. Bradford Jensen

Georgetown University - McDonough School of Business; Peterson Institute for International Economics

Ferdinando Monte

Georgetown University - McDonough School of Business

Multiple version iconThere are 3 versions of this paper

Date Written: July 2017

Abstract

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.

JEL Classification: F1, F14, L8, R1, R2

Suggested Citation

Agarwal, Sumit and Jensen, J. Bradford and Monte, Ferdinando, Consumer Mobility and the Local Structure of Consumption Industries (July 2017). CEPR Discussion Paper No. DP12150, Available at SSRN: https://ssrn.com/abstract=3003929

Sumit Agarwal (Contact Author)

National University of Singapore ( email )

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HOME PAGE: http://www.ushakrisna.com

J. Bradford Jensen

Georgetown University - McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States

Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

Ferdinando Monte

Georgetown University - McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States

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