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Consumer Mobility and the Local Structure of Consumption Industries

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  • Sumit Agarwal
  • J. Bradford Jensen
  • Ferdinando Monte

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.

Suggested Citation

  • Sumit Agarwal & J. Bradford Jensen & Ferdinando Monte, 2017. "Consumer Mobility and the Local Structure of Consumption Industries," NBER Working Papers 23616, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23616
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    References listed on IDEAS

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    Cited by:

    1. Friberg, Richard & Steen, Frode & Ulsaker, Simen A., 2018. "Hump-shaped cross-price effects and the extensive margin in cross-border shopping," Discussion Paper Series in Economics 29/2018, Norwegian School of Economics, Department of Economics.
    2. Erich Battistin & Lorenzo Neri, 2017. "School Performance, Score Inflation and Economic Geography," Working Papers 837, Queen Mary University of London, School of Economics and Finance.

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L8 - Industrial Organization - - Industry Studies: Services
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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