# GGR252H1 Lecture Notes - Lecture 8: Postal Codes In Canada, Distance Decay

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The Converse Breakpoint method make it possible to predict the point

between two centres (E.g. Shopping centres) where the trading influence of

each is equal, we can think of this point as the point or line of indifference

(i.e. Where the utility of the two centres is equal). It sis also the market

boundary between the centres.

The method uses distance and size to calculate the line of indifference (i.e.

The market boundaries)

Converse Breakpoint Method

o Dy= (Dxy) /( 1+ sqrt (Ax/Ay)) - In textbook

o Dxy – distance btwn x and y

o Ax – attraction to X/Y

o Draw breakpoints at 90 degree angles

Technique

The converse formula requires data aon distance between centres and size of

centres. Together these two vairables are thought to adequently measure the

reative utility of the centres. The formula suggests that the utility of the

centre decreases with distance and increases with size

Size meansure could be : numbers of stores, square footage of the centre,

number of employees, number of parking spaces, etc.

The formula calculates the distance of the breakpoint ( line of indifference)

from the subject Centre

Assumptions

Unlike the Theisson polygon method the converse method does not assume

that all centres are equal in attractiveness (size). It does however have the

other unifying assumptions evident in the Theisson method ( fully informed

rational maximize)

Criticism

Again we will find possible weaknesses in the model in its unifying

assumptions, to what extent does the “real world” meet these assumptions?

Is a size measurement an effective surrogate measure of all aspects of image

in attraction? What about the ambiance and design of the centres?

In common with Theisson method the technique produces spatial monopoly

market areas, once the boundaries are established it is assumed that

everybody inside the boundaries shops at the subject centre) n reality we are

more likely to be dealing with overlapping market areas: yes there is a hgh

likelihood that consumers will shop at nearer larger centres but there is

always some possibility that they will shop at other centres. A more

sophisticated gravity model that addresses this concept of overlapping

markets in probability framework is the huff model we will now address

this method in detail.