A New Business Location Choice Model for Transport Demand Forecasting: Theory, Calibration and Application to the Knowledge-based Industries in the London-Cambridge Corridor in the UK

This paper will discuss how robust business location modeling is a prerequisite for realistic medium and long term transport demand forecasts, which is in turn a foundation for dependable appraisals of alternative transport investment, regulatory and pricing scenarios. Integrated land use activity and transport modeling, a joint forecast of activity location and travel demand which take account of the interactions between them, has been widely accepted as a sound theoretical approach to medium and long term transport demand forecasting. However, within such models, the representation of business activity location choices (including both transformation of existing businesses and setting-up of new businesses) remains an Achilles’ heel: the theoretical models do not reflect such key influences upon business location decisions as economies of scale and agglomeration; the implemented model structures often have little or no empirical basis. This paper presents a new and innovative travel demand forecasting tool that incorporates business location responses under alternative policy scenarios. Its theoretical formulation is based on New Economic Geography theories concerning scale economy and agglomeration effects, while its empirical formula are tractable and calibrated using empirical data for detailed industry sectors and a large number of geographic zones. Both passenger and freight demand (including vans) are modeled. The business floor-space rentals provide a lagged feedback to the supply of business floor-space overtime, under land use restraints. Because the new business location models established here incorporates production functions that reflect economies of scale and agglomeration effects, the new business location choice model can be used simultaneously activity location forecasting and assessment of the ‘wider’, productivity impacts. Its model structure can also be used to explore hysteresis effects, e.g. in the case of fiscal stimulus in regeneration areas. The application of the theoretical model to the knowledge-based industries (i.e. R&D, creative industries and business services) in the London-Cambridge corridor will be reported.


  • English

Media Info

  • Media Type: Web
  • Pagination: v.p.
  • Monograph Title: European Transport Conference, 2009 Proceedings

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Filing Info

  • Accession Number: 01345489
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jul 25 2011 7:11AM