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A methodology approach to delineate functional economic market areas: With an iterative three-step spatial clustering procedure

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  • Oberst, Christian A.

Abstract

This paper proposes an iterative three-step spatial clustering procedure to define Functional Economic Market Areas (FEMAs) with an evolutionary computational approach using flow data on economic linkages. FEMAs are needed as basic observation units in disaggregated economic data analysis, since those have to be taken at the spatial level at which the markets operate. Only then can analyses provide accurate and consistent results and allow useful interpretations of variables and the measurement of spillover effects between markets. Therefore FEMAs should, besides their use as analysis regions, serve as basic areas for regional policy or coordination of these. Although functional markets are particularly used in regional science, the proposed concept with the spatial clustering procedure is transferable to other economic fields like business management and marketing research, network or competition analyses. The presented methodology approach is a generalized and ubiquitous, disjunctive and contiguous delineation extended application based on the suggestion in RUSCHE (2009) of a joint application of the AMOEBA clustering procedure by ALDSTADT/GETIS (2006) and an interaction indicator on flow data. The methodology will be illustrated with real-world applications on German commuting data. Also presented is a possible way of computation and illustration of fuzzy market borders (differentiated border densities) as an extension to the procedure.

Suggested Citation

  • Oberst, Christian A., 2011. "A methodology approach to delineate functional economic market areas: With an iterative three-step spatial clustering procedure," CAWM Discussion Papers 55, University of Münster, Center of Applied Economic Research Münster (CAWM).
  • Handle: RePEc:zbw:cawmdp:55
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    Citations

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    Cited by:

    1. Höwer, Daniel & Oberst, Christian A. & Madlener, Reinhard, 2017. "Regionalization Heuristic to Map Spatial Heterogeneity of Macroeconomic Impacts: The Case of the Green Energy Transition in NRW," FCN Working Papers 13/2017, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised 01 Feb 2019.
    2. Oberst, Christian & Oelgemöller, Jens, 2013. "Economic Growth and Regional Labor Market Development in German Regions: Okun’s Law in a Spatial Context," FCN Working Papers 5/2013, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).

    More about this item

    Keywords

    AMOEBA; functional regional markets; fuzzy set theory; market delineation; regionalisation; labor markets regions; travel-to-work areas;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising
    • Z0 - Other Special Topics - - General

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