The Costs and Benefits of Telecommuting: A Review and Evaluation of Micro-Scale Studies and Promotional Literature

Problem

The purpose of this study is to assess the methodologies, assumptions, and results of economic evaluations of telecommuting presented in reports on "small-scale" pilot demonstration programs. Micro-scale studies focus on the costs and benefits at the individual and organizational level whereas macro-scale studies typically focus on estimating the aggregate costs and benefits for regional or national populations of telecommuters.

This report examines four micro-scale studies in order to provide information on the individual costs and benefits of telecommuting using empirical data (most often from employee surveys) that cannot be obtained from macro-scale studies, which are largely hypothetical in nature.

The studies reviewed were:

• Evaluation Report: Telecommuting Pilot Project for the South California Association of Governments (Southern California Association of Governments, 1988)
• County of San Diego Dept. of Public Works, Telecommuting Prototype Program, Telecommuting Pilot Study Final Report (County of San Diego Department of Public Works, 1990)
• State of California Telecommuting Pilot Project Final Report (JALA Associates, 1990), and
• City of Los Angeles Telecommuting Project (JALA International, 1993)

Many other studies were also considered, but only the aforementioned four studies had collected and reported detailed monetized cost-benefit results.

Findings

In the studies considered, not all costs were accounted for. Those that were accounted for remain specific to the "bottom line" of the employer and fail to consider the telecommuter. In general, the primary goal of the studies considered was that of evaluating the feasibility and cost-effectiveness of telecommuting from the employer's perspective. Key costs and benefits of telecommuting were often acknowledged, but not fully quantified.

It is important to realize that the studies reviewed show only a part of the picture and should be used in concert with macro-scale studies. To fully understand the direct and indirect economic ramifications of telecommuting programs, care should be taken to include perspectives of the telecommuter, the employer, and the public sector, with the retrospective costs and benefits correctly assigned to each party. As noted in the Southern California Association of Governments study, "when pooled into a large smaple, this information can give valuable insight into the transportation, energy, and telecommunications impacts of widespread telecommuting."

Finally, it is observed that there is still a need for empirical telecommuting cost/benefit data collection focusing both on direct and indirect costs and benefits for the telecommuter and the employer.