1 Microsimulation of Businesses in ILUMASS Part 3: Treatment of Location & Interaction between Firms Rolf Moeckel and Michael Wegener Workshop of the Land Use Transportation Modelling Group University College London, 2 July 2005

2 Moves Theory on Business Location von Thünen (1875): The isolated State Weber (1909): Location of Industries Hotelling (1929): Stability in Competition Christaller (1933): Central Places Alonso (1965): Location and Land Use Porter (1998): Clusters Rothengatter, Kowalski (2000): Soft Factors

3 Moves of Businesses Businesses that are unsatisfied with their lo- cation might decide to move. The satisfaction of a business with its cur- rent location is checked. If the business is very unsatisfied it looks for alternative sites. If a business can improve its satisfaction significantly it might decide to move. If a business is unsatisfied because the cur- rent site is too small it first checks if there is any adjacent vacancy. Moves

4 Check satisfact. with location Select an alternative location Select a business Accept new location? Evaluate alternative location no (1-10) yes no (11) Another business? yes End no Start Method Business is unsatisfied? no yes Moves

5 Location Satisfaction of a Business There are replaceable and non-replace- able location factors: Replaceable - soft location factors - image of a site - environmental quality - expansion capability - agglomeration effects Non-replaceable - accessibility to customers and employees - size and quality of floorspace - rent - business tax Moves

6 Location Satisfaction of a Business Replaceable location factors: Non-replaceable location factors: Total Utility Moves

7 Select a town Select a zone Select a micro location Geographic-Hierarchical Site Finding Moves

8 Example: Finding an Industrial Site Moves

9 Job Density per Raster Cell Moves Employees per hectare

10 Change of Non-Residential Floorspace Depending on the demand of floorspace de- velopers decide to build new buildings. The time lack between increased demand and floorspace building is represented. Prices are adjusted according to demand, particularly if demand is higher than supply. While smaller sites are built by developers larger sites are built by the later user. Moves

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