Becker Friedman Institute

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The Geography of Consumption

We provide the first cross-sectoral description of local consumption markets. Detailed credit card data show consumers have limited mobility and manage the spatial dimension of their transactions. In more frequently purchased sectors, expenditure declines faster with distance; further, the spatial distribution of transactions becomes more concentrated with income and less affected by travel cost shocks. We propose a simple theory of storability/durability of a sector's output as a new dimension affecting local consumption markets, and provide evidence that consumer mobility influences local employment, establishment density, and establishment size differentially across sectors. Consumers' spatial behavior appears important for analyzing local shocks.

Authors: 
Sumit Agarwal, Georgetown University
J. Bradford Jensen, Georgetown University
Ferdinando Monte, Georgetown University
Publication Date: 
June, 2018
Keywords: 
Publication Status: 
Document Number: 
2017-062.2
File Description: 
Second Version, May 29, 2018