Location Choice Model for Logistic Firms with Consideration of Spatial Effects

Abstract

An overview is presented of a location choice model for logistic firms that takes into account spatial effects. A modeling framework is developed to analyze decisions about location choice for logistic firms by using mixed logit models. In this framework, spatial effects such as the correlation between firms in deterministic terms and the spatial correlation among zones in the error term are captured by mixed logit models. In addition, the dynamics of the consumption of commodities between consumers and suppliers is considered. In a case study, the developed framework is applied to the Tokyo metropolitan area. The model is tested for retailers, wholesalers, and manufacturers. The results of the study indicate that for location choice, the number of employees is a more important determinant for manufacturers than it is for retailers and product wholesalers. Additionally, the results indicate that the spatial effects and the land prices in a given zone strongly affect the decision-making process of all the firms in the metropolitan area.