IDEAS home Printed from https://ideas.repec.org/a/eee/jotrge/v73y2018icp64-74.html
   My bibliography  Save this article

Warehouse rental market segmentation using spatial profile regression

Author

Listed:
  • Lim, Hyunwoo
  • Yoo, Eun-Hye
  • Park, Minyoung

Abstract

Warehouse rental markets can be segmented into multiple submarkets in which rental storage units share similar structural characteristics in that they are reasonably close substitutes for one another with their geographical proximity. Improved understanding of warehouse rental market segmentation enables warehouse owners to effectively formulate marketing strategies and warehouse renters to reduce search costs. Previous studies either assumed a priori submarkets or used cluster analysis to delineate submarkets based entirely on the similarity of rental prices. However, such approaches have limitations in addressing associations between warehouse rents and their determinants because of the potential spatial autocorrelation and multicollinearity in warehouse rent data sets. In the present study, we address the gap in the literature by introducing a method known as Bayesian spatial profile regression for warehouse rental submarket segmentation. This approach allows us to assess meaningful relationships between warehouse rents and their determinants as a unique profile for each submarket, while accounting for spatial autocorrelation in warehouse rents and multicollinearity among their determinants. In a case study, we demonstrated an application of spatial profile regression to a warehouse rent data set for the Seoul Metropolitan Area (SMA) of South Korea and identified two submarkets: high-rent and low-rent groups. The high-rent group was strongly associated with proximity to the urban center in Seoul and Incheon Port, higher floor area ratio, relatively older building age, higher land price, transportation, and automated warehousing services. The associations for the low-rent group were the opposite of the high-rent group and featured proximity to industrial complexes away from the urban center. The results reflected the highly polarized segmentation of the warehouse rental market in the SMA.

Suggested Citation

  • Lim, Hyunwoo & Yoo, Eun-Hye & Park, Minyoung, 2018. "Warehouse rental market segmentation using spatial profile regression," Journal of Transport Geography, Elsevier, vol. 73(C), pages 64-74.
    • Handle: RePEc:eee:jotrge:v:73:y:2018:i:c:p:64-74
    DOI: 10.1016/j.jtrangeo.2018.10.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S096669231830245X
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jtrangeo.2018.10.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Giuliano, Genevieve & Kang, Sanggyun, 2018. "Spatial dynamics of the logistics industry: Evidence from California," Journal of Transport Geography, Elsevier, vol. 66(C), pages 248-258.
    2. Kazi Saiful Islam & Yasushi Asami, 2009. "Housing Market Segmentation: A Review," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 21(2†3), pages 93-109, July.
    3. Sakai, Takanori & Kawamura, Kazuya & Hyodo, Tetsuro, 2015. "Locational dynamics of logistics facilities: Evidence from Tokyo," Journal of Transport Geography, Elsevier, vol. 46(C), pages 10-19.
    4. Bourassa, Steven C. & Hamelink, Foort & Hoesli, Martin & MacGregor, Bryan D., 1999. "Defining Housing Submarkets," Journal of Housing Economics, Elsevier, vol. 8(2), pages 160-183, June.
    5. Sungsoon Hwang & Jean-Claude Thill, 2009. "Delineating Urban Housing Submarkets with Fuzzy Clustering," Environment and Planning B, , vol. 36(5), pages 865-882, October.
    6. Bowen, John T., 2008. "Moving places: the geography of warehousing in the US," Journal of Transport Geography, Elsevier, vol. 16(6), pages 379-387.
    7. Dablanc, Laetitia & Ross, Catherine, 2012. "Atlanta: a mega logistics center in the Piedmont Atlantic Megaregion (PAM)," Journal of Transport Geography, Elsevier, vol. 24(C), pages 432-442.
    8. Craig A Watkins, 2001. "The Definition and Identification of Housing Submarkets," Environment and Planning A, , vol. 33(12), pages 2235-2253, December.
    9. Sakai, Takanori & Kawamura, Kazuya & Hyodo, Tetsuro, 2017. "Spatial reorganization of urban logistics system and its impacts: Case of Tokyo," Journal of Transport Geography, Elsevier, vol. 60(C), pages 110-118.
    10. Richard J. Buttimer, Jr. & Ronald C. Rutherford & Ron Witten, 1997. "Industrial Warehouse Rent Determinants in the Dallas/Fort Worth Area," Journal of Real Estate Research, American Real Estate Society, vol. 13(1), pages 47-56.
    11. David Wheeler & Michael Tiefelsdorf, 2005. "Multicollinearity and correlation among local regression coefficients in geographically weighted regression," Journal of Geographical Systems, Springer, vol. 7(2), pages 161-187, June.
    12. Clark, David & Pennington-Cross, Anthony, 2016. "Determinants of industrial property rents in the Chicago metropolitan area," Regional Science and Urban Economics, Elsevier, vol. 56(C), pages 34-45.
    13. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    14. Christopher Bitter & Gordon Mulligan & Sandy Dall’erba, 2007. "Incorporating spatial variation in housing attribute prices: a comparison of geographically weighted regression and the spatial expansion method," Journal of Geographical Systems, Springer, vol. 9(1), pages 7-27, April.
    15. Goodman, Allen C. & Thibodeau, Thomas G., 1998. "Housing Market Segmentation," Journal of Housing Economics, Elsevier, vol. 7(2), pages 121-143, June.
    16. Cidell, Julie, 2010. "Concentration and decentralization: The new geography of freight distribution in US metropolitan areas," Journal of Transport Geography, Elsevier, vol. 18(3), pages 363-371.
    17. Danlin Yu & Yehua Dennis Wei & Changshan Wu, 2007. "Modeling Spatial Dimensions of Housing Prices in Milwaukee, WI," Environment and Planning B, , vol. 34(6), pages 1085-1102, December.
    18. R Sivitanidou, 1996. "Warehouse and Distribution Facilities and Community Attributes: An Empirical Study," Environment and Planning A, , vol. 28(7), pages 1261-1278, July.
    19. Liverani, Silvia & Hastie, David I. & Azizi, Lamiae & Papathomas, Michail & Richardson, Sylvia, 2015. "PReMiuM: An R Package for Profile Regression Mixture Models Using Dirichlet Processes," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 64(i07).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kang, Sanggyun, 2022. "Exploring the contextual factors behind various phases in logistics sprawl: The case of Seoul Metropolitan Area, South Korea," Journal of Transport Geography, Elsevier, vol. 105(C).
    2. Zhanwei Tian & Guoqing Zhang, 2021. "Multi-echelon fulfillment warehouse rent and production allocation for online direct selling," Annals of Operations Research, Springer, vol. 304(1), pages 427-451, September.
    3. Hyunwoo Lim & Minyoung Park, 2019. "Modeling the Spatial Dimensions of Warehouse Rent Determinants: A Case Study of Seoul Metropolitan Area, South Korea," Sustainability, MDPI, vol. 12(1), pages 1-17, December.
    4. Guerin, Leonardo & Vieira, José Geraldo Vidal & de Oliveira, Renata Lúcia Magalhães & de Oliveira, Leise Kelli & de Miranda Vieira, Henrique Ewbank & Dablanc, Laetitia, 2021. "The geography of warehouses in the São Paulo Metropolitan Region and contributing factors to this spatial distribution," Journal of Transport Geography, Elsevier, vol. 91(C).
    5. Oliveira, Renata Lúcia Magalhães de & Dablanc, Laetitia & Schorung, Matthieu, 2022. "Changes in warehouse spatial patterns and rental prices: Are they related? Exploring the case of US metropolitan areas," Journal of Transport Geography, Elsevier, vol. 104(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hyunwoo Lim & Minyoung Park, 2019. "Modeling the Spatial Dimensions of Warehouse Rent Determinants: A Case Study of Seoul Metropolitan Area, South Korea," Sustainability, MDPI, vol. 12(1), pages 1-17, December.
    2. Oliveira, Renata Lúcia Magalhães de & Dablanc, Laetitia & Schorung, Matthieu, 2022. "Changes in warehouse spatial patterns and rental prices: Are they related? Exploring the case of US metropolitan areas," Journal of Transport Geography, Elsevier, vol. 104(C).
    3. Kang, Sanggyun, 2020. "Warehouse location choice: A case study in Los Angeles, CA," Journal of Transport Geography, Elsevier, vol. 88(C).
    4. Kang, Sanggyun, 2020. "Relative logistics sprawl: Measuring changes in the relative distribution from warehouses to logistics businesses and the general population," Journal of Transport Geography, Elsevier, vol. 83(C).
    5. Kang, Sanggyun, 2020. "Why do warehouses decentralize more in certain metropolitan areas?," Journal of Transport Geography, Elsevier, vol. 88(C).
    6. Meiling He & Jiaren Shen & Xiaohui Wu & Jianqiang Luo, 2018. "Logistics Space: A Literature Review from the Sustainability Perspective," Sustainability, MDPI, vol. 10(8), pages 1-24, August.
    7. Guerin, Leonardo & Vieira, José Geraldo Vidal & de Oliveira, Renata Lúcia Magalhães & de Oliveira, Leise Kelli & de Miranda Vieira, Henrique Ewbank & Dablanc, Laetitia, 2021. "The geography of warehouses in the São Paulo Metropolitan Region and contributing factors to this spatial distribution," Journal of Transport Geography, Elsevier, vol. 91(C).
    8. Marco Helbich & Wolfgang Brunauer & Eric Vaz & Peter Nijkamp, 2014. "Spatial Heterogeneity in Hedonic House Price Models: The Case of Austria," Urban Studies, Urban Studies Journal Limited, vol. 51(2), pages 390-411, February.
    9. Klauenberg, Jens & Elsner, Lucas-Andrés & Knischewski, Christian, 2020. "Dynamics of the spatial distribution of hubs in groupage networks – The case of Berlin," Journal of Transport Geography, Elsevier, vol. 88(C).
    10. Kang, Sanggyun, 2022. "Exploring the contextual factors behind various phases in logistics sprawl: The case of Seoul Metropolitan Area, South Korea," Journal of Transport Geography, Elsevier, vol. 105(C).
    11. Meiling He & Lei Zeng & Xiaohui Wu & Jianqiang Luo, 2019. "The Spatial and Temporal Evolution of Logistics Enterprises in the Yangtze River Delta," Sustainability, MDPI, vol. 11(19), pages 1-20, September.
    12. Nishi, Hayato & Asami, Yasushi & Shimizu, Chihiro, 2021. "The illusion of a hedonic price function: Nonparametric interpretable segmentation for hedonic inference," Journal of Housing Economics, Elsevier, vol. 52(C).
    13. Oliveira, Leise Kelli de & Lopes, Gabriela Pereira & Oliveira, Renata Lúcia Magalhães de & Bracarense, Lílian dos Santos Fontes Pereira & Pitombo, Cira Souza, 2022. "An investigation of contributing factors for warehouse location and the relationship between local attributes and explanatory variables of Warehouse Freight Trip Generation Model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 162(C), pages 206-219.
    14. Rivera-Gonzalez, Carlos & Holguin-Veras, Jose & Calderon, Oriana, 2023. "Supply-chain-focused measures of centrality and spread in metropolitan areas," Journal of Transport Geography, Elsevier, vol. 107(C).
    15. Viljoen, Nadia M. & Joubert, Johan W., 2019. "Supply chain micro-communities in urban areas," Journal of Transport Geography, Elsevier, vol. 74(C), pages 211-222.
    16. Trent, Nadia M. & Joubert, Johan W., 2022. "Logistics sprawl and the change in freight transport activity: A comparison of three measurement methodologies," Journal of Transport Geography, Elsevier, vol. 101(C).
    17. Sakai, Takanori & Kawamura, Kazuya & Hyodo, Tetsuro, 2020. "Logistics facilities for intra and inter-regional shipping: Spatial distributions, location choice factors, and externality," Journal of Transport Geography, Elsevier, vol. 86(C).
    18. Lindsey, Christopher & Mahmassani, Hani S. & Mullarkey, Matt & Nash, Terry & Rothberg, Steven, 2014. "Industrial space demand and freight transportation activity: exploring the connection," Journal of Transport Geography, Elsevier, vol. 37(C), pages 93-101.
    19. Aljohani, Khalid & Thompson, Russell G., 2016. "Impacts of logistics sprawl on the urban environment and logistics: Taxonomy and review of literature," Journal of Transport Geography, Elsevier, vol. 57(C), pages 255-263.
    20. Sakai, Takanori & Beziat, Adrien & Heitz, Adeline, 2020. "Location factors for logistics facilities: Location choice modeling considering activity categories," Journal of Transport Geography, Elsevier, vol. 85(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jotrge:v:73:y:2018:i:c:p:64-74. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-transport-geography .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.