Spatial Distribution of Retail Sales
We examine the distribution of sales for a retail chain in the Houston market using a spatial gravity model. Unlike previous empirical studies, our approach models spatial dependencies among both consumers and retailers. The results show that both forms of spatial dependence exert statistically and economically significant impacts on the estimates of parameters in retail gravity models. Contrary to the suggestions of (Gautschi, D. A. (1981). “Specification of Patronage Models for Retail Center Choice,” Journal of Marketing Research 18, 162–174.) as well as (Eppli, M. J., and J. D. Shilling. (1996). “How Critical Is a Good Location to a Regional Shopping Center?” Journal of Real Estate Research 12, 459–468.), our results show the importance of the distance parameter in retail gravity models may be greatly understated. Thus, ignoring spatial dependence may lead to overestimation of the deterministic extent of trade areas, and underestimate the importance of good locations. Copyright Springer Science + Business Media, Inc. 2005
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Volume (Year): 31 (2005)
Issue (Month): 1 (August)
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- A. Ason Okoruwa & Hugh O. Nourse & Joseph V. Terza, 1994. "Estimating Sales for Retail Centers: An Application of the Poisson Gravity Model," Journal of Real Estate Research, American Real Estate Society, vol. 9(1), pages 85-98.
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- Okoruwa, A. Ason & Terza, Joseph V. & Nourse, Hugh O., 1988. "Estimating patronization shares for urban retail centers: An extension of the Poisson gravity model," Journal of Urban Economics, Elsevier, vol. 24(3), pages 241-259, November.
- Mark J. Eppli & John D. Benjamin, 1994. "The Evolution of Shopping Center Research: A Review and Analysis," Journal of Real Estate Research, American Real Estate Society, vol. 9(1), pages 5-32.
- Mark J. Eppli & James D. Shilling, 1996. "How Critical Is a Good Location to a Regional Shopping Center?," Journal of Real Estate Research, American Real Estate Society, vol. 12(3), pages 459-468.
- Hardin, William G, III & Wolverton, Marvin L, 2001. "Neighborhood Center Image and Rents," The Journal of Real Estate Finance and Economics, Springer, vol. 23(1), pages 31-46, July.
- Mark J. Eppli & James D. Shilling, 1996. "How Critical is a Good Location to a Regional Shopping Center?," Wisconsin-Madison CULER working papers 96-03, University of Wisconsin Center for Urban Land Economic Research.
- C.F. Sirmans & Krisandra A. Guidry, 1993. "The Determinants of Shopping Center Rents," Journal of Real Estate Research, American Real Estate Society, vol. 8(1), pages 107-116.
- S Brown, 1992. "The wheel of retail gravitation?," Environment and Planning A, Pion Ltd, London, vol. 24(10), pages 1409-1429, October.
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