Unformatted text preview: he store, it is possible to estimate
the level of penetration into each neighborhood.
• Combine with Census Tract
• identify the primary (ﬁrst 60%) and secondary market (next 25%) 3.3
4.1 Relevant Concepts
Distance decay, friction of distance
Disincentive nature of distance
Location and Competition (Hotelling)
Utility (distance, size, attraction)
Unifying/Simplifying assumptions Site Selection Techniques
Seven Methods Top ⇒ Down : Qualitative ⇒ Quantitative
c D. Wang & C.Zhao, 2006 8 5
6. THE GEOGRAPHY OF DEMAND: THE MARKET Rule of Thumb: intuition, experience, observation, “gut feeling”
Descriptive inventories: checklist of key factors, which site has the most?
Ranking: rank sites on the basis of key factors thought to be most important
Ratios: sales/population, sales/store, etc.
Analogues: Duplication of existing well performancing sites (follow the leader)
Location Allocation: best set of sites to service existing population
• more likely found in public services, like hospitals 7. Regressive Models
• Only include if statistics veriﬁed.
• Veriﬁcation of relevance of factors
• Simple Regression
• Multiple Regression 4.2 Concept of Regression Simple Regression the association between two variables (one dependent and one
Regression coefﬁcient intuitive and counter-intuitive variables
positive and negative association 4.3 Site Evaluation Using Multiple Regression Dependent Variable Deﬁnition: This variable changes as other variable changes
Independent Variable Deﬁnition: This variable does not change as other variable
Multiple Regression Deﬁnition: the relationship between a dependent variable ($
sales) and several site and situational variables (independent variables: e.g.
How to Apply Regression Analysis
1. For a set of existing sites, need data on sales and potential independent variables
2. Isolated key factors, the individual association of independent variables
3. Develop/Calibrate the regression model
Example: central city sites: car accessability is negative related to sales (counter
• More competitors...
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- Winter '14
- Shopping mall, retail chain, D. Wang