I've been working from home for a month now and I feel more productive. I don't have a few annoying co workers coming to my desk distracting me. I can focus on my work, and if I need to take a break I don't have to hide it at all. I am more comfortable in my PJ's and get to see my daughter more.

I think it allowing people to choose would give the biggest productivity boost. You do better in the office, but I was way less productive in the office. forcing people to do one or the other will hurt productivity.