It pollutes less, due to a non-existent commute time. It’s better for mental health and spending time with your family/friends. It also generally allows you to work your own hours.
As a whole, the only benefit I see to commuting to an office to work is the possibility of meeting new people. If you live alone and suffer from depression, it might not be a good idea to work from home, it could end up with feelings of isolation. It really depends on who you are as a person, and what you feel you need.
While overall it seems that telecommuting is the more efficient mode of working, there are some drawbacks. When a large number of people telecommute (which likely does not happen from the same office) shared resources are not used and each individual employee has to use separate resources from their individual homes. So, the transportation impact is spared but the shared resources of an office (which are presumably in use anyway) are being traded for the electricity, etc. of an individual at home.
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