THE IMPACT OF AGGLOMERATION ECONOMIES ON ESTIMATED DEMAND THRESHOLDS: AN EXTENSION OF WENSLEY AND STABLER
Article Abstract:
Central place theory predicts that geographic markets located in rural areas have lower demand thresholds, and, therefore, a higher frequency of business establishments relative to areas that are more proximate to urban centers, other things being equal. Wensley and Stabler (1998) confirm this prediction using data on the location and frequency of business activities in rural Saskatchewan. We demonstrate that this relationship may not always hold true depending on the existence and magnitude of agglomeration economies. If average cost differences associated with being located in an urbanized area are sufficiently large, then the relationship between urban proximity and number of establishments may be reversed. We provide evidence of this reversal using 1996 cross-sectional data on hospital services in Texas.
Publication Name: Journal of Regional Science
Subject: Social sciences
ISSN: 0022-4146
Year: 2000
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Pricing policy reactions to agglomeration in a market with spatial search
Article Abstract:
Markets with imperfect consumer information and search are characterized by price dispersion and agglomeration. However, previous analyses of pricing and location strategies in such a market have failed to generate substantive results since existing models restrict the spatial dimension of the problem. A probabilistic modeling strategy that does not limit search patterns was used to analyze pricing and location strategies in a market characterized by agglomeration. Results showed that spatial and temporal price dispersion are effective strategies to competitors' agglomeration.
Publication Name: Journal of Regional Science
Subject: Social sciences
ISSN: 0022-4146
Year: 1996
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Pricing in an Urban Spatial Monopoly: A Comment
Article Abstract:
Heffley's recent research on monopoly pricing in urban economics is considered wherein the neutral impact of freight losses upon mill prices is related to an assumption of uniform population density over certain times. Population decay was highlighted in that theory. Proof is demonstrated for the monopolist's mill price not being impacted by transport expenses if population is spread as a function of power. Population decay need not have a direct reference to sensitiveness. Mill price will be inversely related to freight rate when population density falls exponentially.
Publication Name: Journal of Regional Science
Subject: Social sciences
ISSN: 0022-4146
Year: 1984
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