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Atlanta Marriott Marquis, International 2
American Economic Association
Consumption and Space
Sunday, Jan. 6, 2019 8:00 AM - 10:00 AM
- Chair: Liran Einav, Stanford University
The Geography of Consumption
AbstractWe use detailed information from U.S. consumers' credit card purchases to provide the first large-scale description of the geography of consumption. We find that consumers' mobility is quite limited and document significant heterogeneity in the importance of gravity across sectors. Gravity is stronger in more frequently purchased sectors. Consumers actively manage the spatial dimension of their consumption choices: using daily rain precipitation from thousands of weather stations in U.S., we show that shocks to travel costs change the spatial distribution of expenditure, and they do so differentially across sectors. These choices matter for local equilibrium outcomes: using underlying geological variation across U.S. counties, we show that sectors with high storage costs respond with larger employment and denser stores to exogenous differences in population. A simple model where consumers choose how far and how frequently to travel for their purchases rationalizes these findings. Higher storage costs raise the consumers' marginal cost of travel and make demand more spatially concentrated. In response to an increase in population, firms increase output but try to limit the use of distant land, therefore substituting more with labor in high storage costs sectors. Our results suggest that incorporating the demand-side is necessary to analyze the distributional consequences of local and aggregate shocks across regions. These results also suggest the demand-side is critical to understanding the location of firms and employment in the large and understudied service sector.
Assessing the Gains from E-Commerce
AbstractE-commerce represents a rapidly growing share of U.S. retail spending. We use transactions-level data on credit and debit cards from Visa, Inc. between 2007 and 2014 to quantify the resulting consumer surplus. We estimate that the gains from e-commerce reached the equivalent of a 1.3% permanent boost to consumption by 2014, or about $1,250 per household. The gains arose mostly from accessing a wider variety of merchants online, but also from saving the travel costs of buying items in brick-and-mortar stores. The richest counties gained roughly twice as much as the poorest counties (top vs. bottom quartiles), and densely populated counties gained more than sparsely populated counties.
University of Pennsylvania
University of California-Berkeley
University of Pennsylvania
- R2 - Household Analysis
- F0 - General