A Model of Shopping Center Location

Abstract

The purpose of this paper is to present a model of retail employment which includes planned shopping centers in the employment-allocation function. The differences between planned shopping centers and unplanned areas are explored. The model to project retail employment is presented. Multiple sources of demand are allowed and an equilibrium between employment and demand is assumed. A procedure to locate additional planned shopping-center areas is derived. The calibration procedure involves a hill-climbing algorithm, a criterion function, and the partial derivatives of the allocation function. Calibration results indicate a good parameter fit and support the hypothesis that planned shopping centers attract retail employment.