The Donut Effect of COVID-19 on Cities

36 Pages Posted: 27 May 2021

See all articles by Arjun Ramani

Arjun Ramani

Stanford University - Department of Economics

Nicholas Bloom

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: May 22, 2021

Abstract

Using data from the US Postal Service and Zillow, we quantify the effect of Covid- 19 on migration patterns and real estate markets within and across US cities. We find two key results. First, within large US cities, households and businesses have moved from the dense central business districts (CBDs) towards lower density suburban zip-codes. We label this the “Donut Effect” reflecting the movement of activity out of city centers to the suburban ring. Second, while this observed reallocation occurs within cities, we do not see major reallocation across cities. That is, there is less evidence for large-scale movement of activity from large US cities to smaller regional cities or towns. We rationalize these findings by noting that working patterns post pandemic will be primarily hybrid, with workers commuting to their business premises typically 3 days per week. This level of commuting is less than pre-pandemic, making suburbs relatively more popular, but too frequent to allow employees to leave the cities containing their employer.

Keywords: Covid, working-from-home, real-estate, migration

JEL Classification: D13, D23, E24, J22, G18, M54, R3

Suggested Citation

Ramani, Arjun and Bloom, Nicholas, The Donut Effect of COVID-19 on Cities (May 22, 2021). Available at SSRN: https://ssrn.com/abstract=3850758 or http://dx.doi.org/10.2139/ssrn.3850758

Arjun Ramani (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
STANFORD, CA 94305-6072
United States

Nicholas Bloom

Stanford University - Department of Economics ( email )

Landau Economics Building, Room 231
579 Serra Mall
Stanford, CA 94305-6072
United States
650-725-7836 (Phone)

HOME PAGE: http://economics.stanford.edu/faculty/bloom

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
United States

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