What's In A Trade Area
By Dr. Tony Hernandez, Tony Lea and Philip Bermingham
This report is the second in a series of technical research publications by the CSCA. The first focused on the application of Geographically Weighted Regression (GWR) to residential property valuation. This report turns its attention to the underlying concepts and techniques involved in the definition of trade areas. The aim is to provide an overview of the ways in which the 'trade area' concept can be operationalized through a review of the most commonly adopted techniques -- along with some of the less frequently used methods. These range from user-drawn definition techniques based on gut-feel and 'rules of thumb' to computational and data intensive spatial interaction modeled approaches. The report critically addresses the question "What's in a trade area?', and as such, provides a synthesis and review of the myriad of trade area techniques available to the location analyst. Some of the techniques discussed can be traced back to research undertaken more than fifty years ago to an era in which the automation capabilities of computers and GIS technologies were simply not envisaged. The report therefore also comments on the role of GIS and associated database technologies in facilitating development in trade area analysis. It questions the impact that GIS development over the last decade has had upon industry practice. A summary table is provided towards the end of the report facilitating comparison of the techniques and their application. In addition, a selected bibliography is also provided for readers interested in finding sources of further information about specific techniques.