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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
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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
Moves
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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
Start
Method
Moves
Select a business
Check satisfact. with location
no
Business is unsatisfied?
yes
Select an alternative location
Evaluate alternative location
no (1-10)
Accept new location?
no (11)
yes
yes
Another business?
no
End
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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
Geographic-Hierarchical Site Finding
Moves
Select a town
Select a zone
Select a micro location
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Example Finding an Industrial Site
Moves
12.200
3.000
10.000
10.000
4.500
8.500
9
Job Density per Raster Cell
Moves
0.5
Employees per hectare
5000.0
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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
11
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