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)

yesno (11)

Another business?

yes

End

no

StartMethod

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

...321 lllur

...321 lllunr

nrrt uuu

Moves

7

Select a town

Select a zone

Select a micro location

Geographic-Hierarchical Site Finding

Moves

8

Example: Finding an Industrial Site

Moves

3.000

12.200

10.000 10.000 4.500

8.500

0 0

8.000

15.000

9

Job Density per Raster Cell

Moves

0.5

5000.0

Employeesper 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

11