Interesting post from the Environmental and Urban Economics blog:
"I live six miles east of the Pacific Ocean. As I drive west to the beach along Wilshire blvd, there are many upscale car dealerships that take up a whole block because cars can't be stocked on top of each other. I have thought that this was an inefficient use of land. In today's WSJ, I read that Cadillac will be getting rid of many of its showrooms and replacing the large showroom with a much smaller virtual reality setup. So, a prospective buyer would put on one of these helmets and take a virtual tour to see what the car is like (and perhaps how it drives?). The interesting urban economics here is whether this VR approach generalizes for other businesses such that their aggregate demand for commercial real estate will decline. In 2016, who (besides for Amazon and Starbucks) needs physical space? Can all urban space just be converted into residential units? Will VR reduce the need for face to face meetings as people can sit in their own house and pretend that they are having a face to face meeting because the VR places you into the same "room" with the other VR conference participants? In this case, carbon emissions from transport would fall and less time would be wasted commuting and offices would need fewer "conference rooms". Information technology and urban economics represents a growth field!"