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Market Reach for Retail Services

Author

Listed:
  • Johan Klaesson

    (Jönköping International Business School)

  • Özge Öner

    (Research Institute of Industrial Economics, Sweden)

Abstract

Retail is concentrated in areas where demand is high. A measure of market potential can be used to calculate place-specific demand for retail services. The effect of distance on market potential depends on the willingness of consumers to travel for the products they purchase. The spatial reach of demand is frequently operationalized using a distance-decay function. The purpose of this paper is to estimate such distance-decay functions for different branches of the retail sector. The paper uses spatial data from the Stockholm region in Sweden. The results indicate that, in line with theory, there are indeed differences in the distance decay of demand among retail subsectors.

Suggested Citation

  • Johan Klaesson & Özge Öner, 2014. "Market Reach for Retail Services," The Review of Regional Studies, Southern Regional Science Association, vol. 44(2), pages 153-176, Summer.
    • Handle: RePEc:rre:publsh:v44:y:2014:i:2:p:153-176
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    References listed on IDEAS

    as
    1. B. Curtis Eaton & Richard G. Lipsey, 1975. "The Principle of Minimum Differentiation Reconsidered: Some New Developments in the Theory of Spatial Competition," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(1), pages 27-49.
    2. Bunch, David S. & Bradley, Mark & Golob, Thomas F. & Kitamura, Ryuichi & Occhiuzzo, Gareth P., 1993. "Demand for clean-fuel vehicles in California: A discrete-choice stated preference pilot project," Transportation Research Part A: Policy and Practice, Elsevier, vol. 27(3), pages 237-253, May.
    3. Shunfeng Song, 1996. "Some Tests of Alternative Accessibility Measures: A Population Density Approach," Land Economics, University of Wisconsin Press, vol. 72(4), pages 474-482.
    4. Öner, Özge & Larsson, Johan P., 2013. "Location and Co-location in Retail - A Probabilistic Approach Using Geo-coded Data for Swedish Metropolitan Retail Markets," HUI Working Papers 80, HUI Research.
    5. M Batty, 1971. "Exploratory Calibration of a Retail Location Model Using Search by Golden Section," Environment and Planning A, , vol. 3(4), pages 411-432, December.
    6. Johan Larsson & Özge Öner, 2014. "Location and co-location in retail: a probabilistic approach using geo-coded data for metropolitan retail markets," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 385-408, March.
    7. Ingene, Charles A. & Yu, Eden S. H., 1981. "Determinants of retail sales in SMSAs," Regional Science and Urban Economics, Elsevier, vol. 11(4), pages 529-547, November.
    8. John J. Gruidl & Dimitri Andrianacos, 1994. "Determinants Of Rural Retail Trade: A Case Study Of Illinois," The Review of Regional Studies, Southern Regional Science Association, vol. 24(1), pages 103-118, Summer.
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    Citations

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    Cited by:

    1. Mihaescu, Oana & Korpi, Martin & Öner, Özge, 2020. "Are New Shopping Centers Drivers of Development in Large Metropolitan Suburbs? The Interplay of Agglomeration and Competition Forces," Ratio Working Papers 332, The Ratio Institute.
    2. Oana Mihaescu & Martin Korpi & Özge Öner, 2024. "Does new shopping centre development benefit or harm the local suburban market? Heterogeneous effects from shopping centre type and distance," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 73(3), pages 1339-1363, October.
    3. Daunfeldt, Sven-Olov & Mihaescu, Oana & Öner, Özge & Rudholm, Niklas, 2019. "Retail and place attractiveness: The effects of big-box entry on property values," HFI Working Papers 1, Institute of Retail Economics (Handelns Forskningsinstitut).
    4. Giulio Grossi & Marco Mariani & Alessandra Mattei & Patrizia Lattarulo & Ozge Oner, 2020. "Direct and spillover effects of a new tramway line on the commercial vitality of peripheral streets. A synthetic-control approach," Papers 2004.05027, arXiv.org, revised Nov 2023.

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    More about this item

    Keywords

    retail; market potential; distance-decay;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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