COVID Reallocation of Spending: The Effect of Remote Working on the Retail and Hospitality Sector

46 Pages Posted: 13 Dec 2021

See all articles by Gianni De Fraja

Gianni De Fraja

University of Nottingham

Jesse Matheson

University of Sheffield

Paul Mizen

University of Nottingham; Bank of England; Centre for Economic Policy Research (CEPR)

James Rockey

University of Birmingham - Department of Economics

Shivani Taneja

University of Nottingham

Gregory Thwaites

University of Nottingham - School of Economics

Date Written: December 2, 2021

Abstract

A defining economic outcome from the COVID-19 pandemic is the unprecedented shift towards remote working from home. The extent and duration of this shift will have important consequences for local economies and especially the retail and hospitality sectors which depend on business around the workplace. Using a new bespoke, nationally representative survey of UK working age adults we analyse their ability and willingness to work remotely, and the consequences for spending on food, beverages, retail and entertainment around the workplace. We establish five key facts. (i) The post-pandemic change will be large: the fraction of work done from home will increase by 20 percentage points over its pre-pandemic level. (ii) The Dingel-Neiman (2020) assessment of remote working potential by occupation are reasonably predictive of what workers and employers expect to do, with a correlation coefficient of over 0.7. (iii) Relocation will be higher for better paid professional occupations, which will skew spending toward the most socio-economically affluent geographical areas. (iv) The corresponding geographical shift in annual retail and hospitality spending will be £3.0 billion with more remote working shifting demand away from urban areas. (v) On average, a 1% change in neighbourhood workforce changes local spending by 0.25%.

Keywords: COVID-19, work-from-home, local labour markets

JEL Classification: R12, J01, H12

Suggested Citation

De Fraja, Gianni and Matheson, Jesse and Mizen, Paul and Rockey, James Charles and Taneja, Shivani and Thwaites, Gregory, COVID Reallocation of Spending: The Effect of Remote Working on the Retail and Hospitality Sector (December 2, 2021). Available at SSRN: https://ssrn.com/abstract=3982122 or http://dx.doi.org/10.2139/ssrn.3982122

Gianni De Fraja

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Jesse Matheson (Contact Author)

University of Sheffield ( email )

9 Mappin Street
Sheffield, S1 4DT
United Kingdom

HOME PAGE: http://sites.google.com/sheffield.ac.uk/jessematheson

Paul Mizen

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom
+44 115 951 5479 (Phone)
+44 115 951 4159 (Fax)

Bank of England

Threadneedle Street
London, EC2R 8AH
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

James Charles Rockey

University of Birmingham - Department of Economics ( email )

University House
University of Birmingham
116 Edgbaston Park Rd, Birmingham B15 2TY
United Kingdom

Shivani Taneja

University of Nottingham ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Gregory Thwaites

University of Nottingham - School of Economics ( email )

Sir Clive Granger Building
Universit Park
Nottingham, Nottinghamshire NG72RD
United Kingdom

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
389
Abstract Views
1,543
Rank
141,084
PlumX Metrics