A Note on the Geographic Interdependencies of Retail Market Areas

David Mushinski and Stephan Weiler

Journal of Regional Science, 2002, vol. 42, issue 1, 75-86

Abstract: Central place theory describes an orderly hierarchy of places, with particular retail services developing for lower‐ordered places as they reach a threshold. Yet it is likely that nearby areas could serve simultaneously as a source of demand and a source of competing supply for retail stores in a place. This paper contributes to the understanding of local economic development by modeling and estimating the geographic interdependence between a place and its neighboring areas. The simultaneous equation Tobit results suggest that such geographical interdependence exists for most retail industries, with spatial competition on the supply side being particularly important.

Date: 2002
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