Work-from-Home and Cities: An Elementary Spatial Model

Jan K. Brueckner

No 11121, CESifo Working Paper Series from CESifo

Abstract: This paper analyzes the urban impacts of hybrid WFH in the simplest possible model, relying on Leontief utility and production functions and other simplifying assumptions. The analysis shows that introduction of WFH raises both the wage and land consumption of households while shrinking the size of the business district and reducing business land rent. When WFH requires home work-space, the city’s overall spatial size increases, with residential rents rising in the suburbs while falling near the center. The decline in business rent and the rotation of the residential rent contour match empirical evidence showing that WFH reduces office-building values and flattens the residential rent gradient.

Keywords: work from home; cities; commuting; land rents; productivity (search for similar items in EconPapers)
JEL-codes: J01 R14 R31 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11121

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