Cross-border commuting and consuming: an empirical investigation

Thomas Mathä, Alessandro Porpiglia and Michael Ziegelmeyer

Applied Economics, 2017, vol. 49, issue 20, 2011-2026

Abstract: This article contributes to our understanding of cross-border activity in general and the determinants of cross-border trade in particular by focusing on the part of cross-border sales that arise due to work-related cross-border crossings of households. We analyse empirically how cross-border consumption expenditures vary across product and services categories as well as household characteristics using representative household survey data of cross-border commuters to Luxembourg. In total, these households spend an estimated 17% of their gross annual income across the border, contributing about 10% to the total household final consumption expenditure (HFCE) in Luxembourg. Cross-border expenditure is linked to individual- and household-related characteristics and to distance between home and work. Cross-border commuters systematically exploit arbitrage opportunities that arise because of existing price level (index) differences between the country of work and the country of residence.

Date: 2017
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Related works:
Working Paper: Cross-border commuting and consuming: An empirical investigation (2014)
Working Paper: Cross-border commuting and consuming: an empirical investigation (2014)
Working Paper: Cross-border commuting and consuming: An empirical investigation (2014)
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DOI: 10.1080/00036846.2016.1231902

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