California Partners for Advanced Transportation Technology

This report evaluates the costs and benefits of home-based telecommuting. Combining empirical data from the literature with a Monte Carlo simulation technique, a distribution of cost-benefit ratios is produced from three perspectives: the employer, the telecommuter, and the public sector.... Depending on the underlying assumptions, the results indicate that telecommuter benefit-cost ratios are generally above one if the employer bears the majority of the equipment cost burden. ...Even when parking and office space benefits are included, productivity lies at the heart of the telecommuting cost-benefit analysis from the employer's perspective, and in almost all cases, the employer's case relies on some assumed maintenance or increase in productivity as the primary benefit. It is also shown that the potential for office and parking space benefits are high, although these benefits remain somewhat questionable. ...Based on our analysis, we conclude that the public sector air quality and construction avoidance benefits remain somewhat questionable based on the current knowledge, and difficult to justify.... Keywords: telecommuting, cost-benefit analysis, simulation, telecommunication