In this article, we set out the relationships between the behavioural and spatial responses to working-from-home. The analytical framework centres explicitly on the choice of commuting frequency in light of technological shifts. It is the commuting frequency which is the key decision-making variable that endogenously reshapes the relationships between other spatial and non-spatial variables.
We find that optimal commuting frequency is positively related to the opportunity costs of less-than-continuous face-to-face interaction and inversely related to commuting costs. As well as a “donut effect” with growth in the suburbs and hinterlands around cities, our results also identify a “shadow effect” in smaller cities. The reason is that, somewhat counterintuitively, commuting frequency optimisation magnifies the benefits of working-from-home in larger cities because of a greater decrease in the burden of commuting. Our results imply enhanced productivity of larger cities over smaller cities, suggesting that the economic divergence between large cities and left-behind places is likely to persist.
This paper was updated in November 2024. The original 2022 paper is still available to read.
