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Title:A methodology approach to delineate functional economic market areas: With an iterative three-step spatial clustering procedure PDF Logo
Authors:Oberst, Christian A.
Issue Date:2011
Series/Report no.:CAWM discussion paper / Centrum für Angewandte Wirtschaftsforschung Münster 55
Abstract:This paper proposes an iterative three-step spatial clustering procedure to define Functional Economic Market Areas (FEMAs) with an evolutionary computational approach using flow data on economic linkages. FEMAs are needed as basic observation units in disaggregated economic data analysis, since those have to be taken at the spatial level at which the markets operate. Only then can analyses provide accurate and consistent results and allow useful interpretations of variables and the measurement of spillover effects between markets. Therefore FEMAs should, besides their use as analysis regions, serve as basic areas for regional policy or coordination of these. Although functional markets are particularly used in regional science, the proposed concept with the spatial clustering procedure is transferable to other economic fields like business management and marketing research, network or competition analyses. The presented methodology approach is a generalized and ubiquitous, disjunctive and contiguous delineation extended application based on the suggestion in RUSCHE (2009) of a joint application of the AMOEBA clustering procedure by ALDSTADT/GETIS (2006) and an interaction indicator on flow data. The methodology will be illustrated with real-world applications on German commuting data. Also presented is a possible way of computation and illustration of fuzzy market borders (differentiated border densities) as an extension to the procedure.
Subjects:AMOEBA
functional regional markets
fuzzy set theory
market delineation
regionalisation
labor markets regions
travel-to-work areas
JEL:R12
R23
J61
M3
Z0
Document Type:Working Paper
Appears in Collections:CAWM Discussion Papers, Universität Münster

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