March 4, 2014
GGR252 Lecture 8
- Huff model
o This may be a better method, but it is difficult to visualize once you get multiple centres
The Huff model casts Reilly's law of retail gravitation in a probabilistic framework
o Formula ݑ
ܲ ݏ ൌ ݐݐ݈ܽ▯ݑݐ݈݅݅ݐݕ
Huff postulated that the probability that a consumer at point "i" will travel to shopping
centre "j", P_ij, is a ratio of the utility of the shopping centre to the consumer (u_ij) and
the total utility of all shopping centres (∑ u_ij) that may be considered by the
Components of utility are:
x Size of the centre (e.g., gravity; attraction of the centre to the consumer)
x Distance to the centre (e.g., proximity of the centre to the consumer)
P_ij is the proportion of sales from neighbourhood "i" that goes to a particular
shopping centre "j" in the context of all competing facilities.
x The value affects the distance variable
x If the value is large, then higher friction of distance (e.g., convenience store)
x If the value is small, then less friction of distance
x The value is determined by experience
x Over time, exponent b can change if the market becomes more or less mobile
x Assume b = 1
To apply the model, we need:
x A measure of size (e.g., number of stores, number of employees, etc.)
x A measure of accessibility (e.g., distance or travel time)
x Data on market (e.g., CT’s, FSA’s, HH’s, POP. $$, HH expenditure)
o For each census tract, how much money is likely to be available to be
spent at the shopping centre?
o Every store has a probability of capturing some of the income from all
census tracts or zones
o Refer to Appendix B for household expenditure data
To calculate the potential expenditure
x Estimate of friction of distance for retail type (e.g., exponent b) o Applications
Assess theoretically the existing market size (POP. HH’S, $$) for each centre by
calculating the population of each market area that will shop at each centre.
x What is now in theory?
Address a number of “what if” questions (e.g., strategy, forecasting)
x What could change?
x How will the market share change with the introduction of a new centre?
Removal of a centre? Change in size of an existing centre?
x What if the spatial distribution of the market changes ($$, ↑, ↓)?
x What if the mobility of the market changes (exponent b)?
o Assumptions and criticisms
Unlike the Thiessen and converse, Huff is not a spatial monopoly method but utility is
still only measured by relative proximity and size, other assumptions are much the
same. Theoretical versus actual normative.
o Behavioural models
Where does the market actually come from?
x This is the actual composition of the market
x Cannot be