Profit Pools and Determinants of Potential County-Level Manufacturing Growth

Business location research often focuses on evaluating specific policies or explaining outcomes for a particular region. Further, the micro-foundations of random profit maximization supporting manufacturing location analysis often lack the intuitive nature of demand thresholds. While this article maintains these micro-foundations, it introduces a unifying concept of profit pools and examines how proximate supply/cost factors determine potential local manufacturing size. The approach avoids a number of limitations associated with other locational choice models. Restricted-access establishment-level data from the Longitudinal Business Database along with secondary data sources produce a model to estimate county-level contributors to outcomes of manufacturing establishment growth and consolidation. The analysis offers improved methods and accuracy for modeling establishment location outcomes, including accuracy in measuring industry size and methods for choosing among various count data distributions. The locational factors associated with county-level potential for manufacturing vary in magnitude and significance depending on the type of manufacturing, while affirming the importance of agglomeration across manufacturing types.

Locational Choices: Modeling Consumer Preferences for Proximity to Others in Reserved Seating Venues

This article proposes a measurement approach to determine how consumers prefer to locate themselves in proximity to others during consumption experiences, such as when they purchase reserved seating tickets to a performance. Applied to data from locational choice experiments that simulate reserved seating assortments, administered to more than 2,000 participants, this approach reveals the importance of modeling proximity to others when studying locational choices. It also emphasizes the degree to which consumers are heterogeneous in their preferences for proximity to both focal elements (e.g., stage, screen, aisles) and other consumers. Therefore, event operators should collect data beyond purchase ticket logs and also include consumers who did not purchase. Furthermore, this study illustrates how managers can use fitted, individual-level parameters and an optimization model to make more effective seat-level availability decisions. In addition to these recommendations for managers of reserved seating venues, this article offers novel contributions to research related to advance selling, spatial models, and personal space.

Toward Job or Amenity?: Evaluating the Locational Choice of Internal Migrants in China

This study provides new evidence on the debate of job opportunities versus urban amenities in determining the locational choice of migrants. We employ a conditional logit model to generate credible estimates, using two large representative data sets on China’s internal migrants. Our findings confirm that both job opportunities and amenities play consistent and salient roles in the geographical choice of internal migrants, while highly skilled migrants tend to attach more importance to urban amenities. Additionally, China’s household registration system seems to play an undeniable role: migrants are increasingly shunning cities providing better quality public services that are still largely inaccessible to temporary migrants in China.

The Urban Mortality Transition and Poor-Country Urbanization

Today, the world’s fastest-growing cities lie in low-income countries, unlike the historical norm. Also, unlike the “killer cities” of history, cities in low-income countries grow not just through in-migration but also through their own natural increase. First, we use novel historical data to document that many poor countries urbanized at the same time as the postwar urban mortality transition. Second, we develop a framework incorporating location choice with heterogeneity in demographics and congestion costs across locations to account for this. In the framework, people prefer to live in low-mortality locations, and the aggregate rate of population growth and the locational choice of individuals interact. Third, we calibrate this to data from a sample of poor countries and find that informal urban areas (e.g., slums) can absorb additional population more easily than other locations. We show that between 1950 and 2005 the urban mortality transition could have doubled the urbanization rate as well as the size of informal urban areas in this sample. Of these effects, one-third could be attributed to the amenity effect of lower urban mortality rates, while the remainder is due to higher population growth disproportionately pushing people into informal urban areas. Fourth, simulations suggest that family planning programs, as well as industrialization or urban infrastructure and institutions may be effective in slowing poor-country urbanization. (JEL I12, J11, N30, O15, O18, R11, R23)