Sumit Agarwal
J. Bradford Jensen
Ferdinando Monte

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. 

Publication Type
Working Paper
File Description
First version, January 2020
JEL Codes
R10: General Regional Economics (includes Regional Data)
R20: Urban, Rural, Regional, Real Estate, and Transportation Economics: Household Analysis: General
F10: Trade: General
F14: Empirical Studies of Trade
L80: Industry Studies: Services: General
equilibrium employment
establishment density
sector employment