Comput., Environ. and Urban Systems, Vol. 22, No.

3, pp 219240, 1998
Pergamon # 1998 Elsevier Science Ltd. All rights reserved
Printed in Great Britain
0198-9715/98 $19.00 + 0.00

PII: S0198-9715(98)00048-9

COMMERCIAL FACILITY LOCATION MODEL USING

MULTIPLE REGRESSION ANALYSIS

Nobuaki Satani *, Akira Uchida *, Atsushi Deguchi *,

Akira Ohgai {, Seiji Sato {{ and Satoshi Hagishima *
*Department of Architecture, Kyushu University, Fukuoka City, Japan
{
Department of Architecture and Civil Engineering, Toyohashi University
of Technology, Toyohashi City, Japan
{{
Department of Architectural Engineering, University of Oita, Oita City,
Japan

ABSTRACT. This paper describes a simulation model for estimating radical

changes in the location of retail facilities that is applied to the Fukuoka
metropolitan area of Japan. The model has three important characteristics. First,
it clears the retail employment by applying multiple regression analysis and a
modified Huff model incorporating distance and population. Secondly, it
allocates retail employment for two types of retail stores: convenience-goods
stores and shopping-goods stores. Thirdly, it computes commercial floor area for
each retail type. # 1998 Elsevier Science Ltd. All rights reserved

NOMENCLATURE

Variables

Pi(t) population of district i

Emi (t) employees of district i
Wim(t) sales floor area of district i
Si land area of district i
Cij distance from district i to district j
l parameter for the attraction force for the sales floor area
k parameter for the distance resistance (k > 0)
k, K proportional fixed number
Tmij (t) probability that inhabitants in i choose facilities in j
Ga gravitation force by a
Fi(t) total floor area of commercial facilities
Li(t) commercial land-use area
Lci capacity of the commercial land-use area
Ri(t) floor area ratio
Rci controlled value of the floor area ratio

219
220 N. Satani et al.

Superscripts and subscripts

m type of retail facility (convenience goods or shopping goods)

t estimation period
i, j district number

INTRODUCTION

Several phenomena were observed in Japan following the depopulation of the central
business districts in the 1960s. Retail facilities tended to be located in the suburbs and the
scale of the retail facilities tends to be larger. Shopping districts in the center of
metropolitan areas tend to be on the decline due to de-commercialization. Causes of the
de-commercialization include: (1) increased traffic congestion in the center of metropolitan
areas caused by the growth in car ownership; (2) soaring land prices in the center of
metropolitan areas; (3) the ease of opening large-sized stores by amending the law; and (4)
retail facilities are easily located in any zone under the Japanese zoning system. Political
issues are required to consider these issues, making it important to understand the location
trends of retail facilities.

Previous Studies
Reilly (1931) study of trading areas suggested the concept of population potential. Eq.
(1) shows that the size of the trading area in a city is assumed to be in proportion to the
city's population and inversely proportionate to the power b to the distance of the city.
Pa
Ga / : 1
Ca

A retail spatial interaction model was developed by Huff (1963) and Lakshumanan &
Hansen (1965). Their model adjusted the sales floor area by a power of l. The parameter l
represents the force of attraction. This modified Huff Model, shown in Eq. (2), takes the
sales floor area as a known quantity. From this it can then estimate the influence on the
trading area of an increase in the sales floor area.
Wj =Cij
Tij : 2
 j Wj =Cij

Harris & Wilson (1978) proposed a model that estimated the spatial location of the
commercial floor area by introducing the concept of commercial floor investment into the
Modified Huff Model. Kim et al. (1991) empirically formulated indices for each land-use
by using statistical methods and proposed a land-use forecasting method that utilized these
methods. These studies provide the basis for the attempt in this study to develop a practical
model for estimating the location trends of retail facilities.
 Commercial Facility Location Model 221

Research Objective
This study proposes a new commercial facility location model which combines the
Modified Huff Model and multiple regression analysis. The model deals specially with
retail trade and is applied to the Fukuoka metropolitan area of Japan.
This paper is organized as follows. The immediately following section explains the
model. The next section considers the applied example. Concluding comments are
provided in the final section.

THE COMMERCIAL FACILITY LOCATION MODEL

Model Assumptions
Four assumptions were made in constructing the model. The model first assumes that
the sales floor area of retail facilities is influenced by the population in surrounding areas
and their accessibility to the facilities. Thus, the model uses the Modified Huff Model
which uses the population of surrounding areas and the distance from these areas as its
explanation variables.
Second, four ranks of retail facilities were assumed as shown in Figure 1. The size of the
purchasing area is assumed to be different for each rank: central commercial districts, sub-
central commercial districts, local commercial districts, and neighborhood commercial
districts. The influence of the purchasing area on the surrounding districts is also different
for each rank. Thus, the district and purchasing area for each rank was determined by
empirical investigations. The central commercial districts is influenced by the population
of the entire metropolitan area. The influence of the sub-central commercial districts is
about 5 km. The influence for local commercial districts is about 2 km. The influence of a
neighborhood commercial district is limited to a particular district and its neighboring

FIGURE 1. Diagram of purchasing area.

222 N. Satani et al.

districts. Eq. (1) was used to determine the purchasing area by applying multiple regression
analysis.
Third, the model assumes that retail trade can be classified into either ``convenience
goods'' or ``shopping goods.'' This classification is used to determine the location, scale,
goods composition, and plans for retail stores. Convenience goods are the necessities of life
such as food which implies that these stores are used with high frequency. Shopping goods
refer to nonessential or luxury items which are dependent on one's taste such as clothes.
This implies that the frequency of using these stores is not as high as for convenience
goods. The model takes these behavioral patterns into consideration by identifying two
retail types.
Finally, the model includes a method which controls the overall trend by accumulating
the estimated values, and checking these values against the permissible values for each
statistical district.

Structure of the Model

An outline on the model is shown in Figure 2. First, the number of retail employees is
estimated using two methods in [STEP1]. One estimate is obtained by applying the
Modified Huff Model; the other uses multiple regression analysis. Secondly, the value for
the sales floor area per employee is estimated in [STEP2]. This value is called The Original
Unit. Thirdly, the sales floor area is estimated by multiplying the number of employees by
the original unit in [STEP3]. Lastly, the final value is fixed by the criteria applied to two
phases in [STEP4].
The first criterion checks whether the estimated increase in an area can be
accommodated by the existing land-use area. The second criterion determines whether
increased floor area ratio can be accommodated within the control value specified by law
for each land-use. The values for the year 2010 can be estimated by applying these four
steps at intervals of five years from 1995.

Estimation of Employees [STEP1]

Estimating the number of employees by the Modified Huff Model. The Modified Huff
Model is shown in Eq. (2). Tm ij is a probability that inhabitants of district i in period t will
go shopping at retail facilities in j when the assumed sales floor area of type m is Wjm. The
number of people who go shopping is j is got by multiplying Tm ij by the number of
inhabitants in i as shown in Eq. (3).

Pi tTm
ij t: 3

The number of retail trade employees in j is proportional to the number of people who
go shopping to j. That is, the more customers who come, the more retail employees are
necessary. This expression is given in Eq. (4) as follows.

Em m
j t /  i Pi tTij t: 4
 Commercial Facility Location Model 223

FIGURE 2. Flowchart of the estimation.

Km
i is assumed to be a fixed number. Then Eq. (5) allows the number of employees to be
estimated for an assumed value of Wjm.

Em m m
j t  i Ki Pi tTij t: 5

The procedure for computing Kim is shown in the following equation. It assumes that the
number of retail employees per customer changes over time.
m
m

Kmi Ei t=Pi t = Ei t 1=Pi t 1 :

The time period, t can now be set to the target period, and Wm replaced by Wm t 1
and DWm . This allows Tmij t in period t to be estimated by using Eq. (2) and an assumed
224 N. Satani et al.

sales floor area increase (DWm . Furthermore, the number of employees in period t, Em j t,
can be estimated by multiplying Tm ij t by P i t.
Estimating the number of employees by Multiple Regression Analysis. As was mentioned
above, the sphere of the purchasing area is classified into four ranks: central commercial
district, sub-central commercial district, local commercial district, and neighborhood
commercial district. The influence of the purchasing area on surrounding districts is
different for each rank as determined by empirical investigation. This was done by
applying the Gravity Model shown in Eq. (1). This assumes that the number of employees
in j is proportional to the population potential of districts around j. The influence of retail
facilities in j on the population in i can be explained by this concept. If there are great
differences between the areas near each district, the influence for the potential by the inner
distance is great. Therefore, the model uses multiple regression analysis to define a given
district as the first member of Eq. (6a) and the surrounding districts as the second member.
The first member of this equation is used to adjust the influence by the area of the given
statistical district. The second member is the population potential inside the purchasing
area for each rank as described above.
Pi t Pj t
Em m
i t a1 m
 l am
l  j2l
m
m a0 : 6a
Cii Cji

The growth of the employment of type m in district i per person is Kim. Eq. (6b) takes
this adjustment into consideration by using Kim on each district.
( )
m
m
m Ki Pi t m
Km
j Pj t
m
m Ei 0obs
Ei t a1 m
 l al  j2l m
a0 : 6b
Cii Cji Em
i 0est

The number of employees in period t can, therefore, be estimated by entering the

population in t in Eq. (6b).
Fixing the number of employees. The estimated value by the Modified Huff Model is
comparatively low for districts on the border of the study area. On the other hand, values
for the multiple regression analysis depend mainly on past changes. As a result, this value
reacts slowly at the center of the study area and is more realistic at the border. However,
these values are not combined to estimate a single value. Instead, each value is estimated
separately and combined in the last step.

Estimating the Original Unit [STEP2]

The number of employees were estimated in the previous step. Now, the original unit for
the conversion of employees into the sales floor area will be estimated. The original unit is
the value of the sales floor area per retail employee. The original unit was first measured by
investigating the actual conditions. This value changes as time goes on. An original unit of
type m in district i at period t is given in Eq. (7).
Wmi t
Um
i t m : 7
Ei t
Now, aim(t) is defined as the change of the original unit from period t 7 1 to t. Therefore,
 Commercial Facility Location Model 225

Um m
i tUi t1
am t tt1 ;

8
Um m m
i t ai t Ui t 1;

Wmi t Wmi t1
Em t am
i t Em t1 :
i i

The original unit of type m at period t can, therefore, be estimated for each district by
applying Eq. (8).

Estimating the Sales Floor Area [STEP3]

The sales floor area for each district can be estimated by multiplying the number of
employees in the district by the original unit. This is done by applying Eq. (9) which is a
modified form of Eq. (8).
Wmi t 1 m
Wm m
i t ai t E t: 9
Ei t 1 i
m

Checking by the Permissible Value [STEP4]

If an estimated sales floor area has increased, it is necessary to determine whether the
increase can be located or not by employing two checks at this step. The first check is the
land-use area. If it passes this check, it is then checked by the allowable floor area ratio.
Land-use area check. For the land-use area check, it is necessary to calculate the land-use
area from the sales floor increase Li(t), given by the past trend. The value of Li(t) is
estimated from Eq. (10) using the ratio of the existing land-use area Li t 1 to the total
floor area, Fi t 1 of the commercial facilities in period t 1. This value is checked up by
comparing Li t and Lci .
Li t 1
Li t Li t 1
Wi t: 10
Fi t 1

If Li t < Lci ! no revision is needed,

If Li t > Lci ! check by floor area ratio.
Check by floor area ratio. Controls based on the zoning system exist in each district. In
cases where there is a shortage of land, Lci, it is assumed that the floor area ratio can be
increased by expansion or redevelopment. For this check, the value of Ri(t) must be
calculated using the estimated sales floor area increase DWi t. The value of Ri(t) is given
by Eq. (11). It is evaluated by comparing Ri(t) and Rci.

Fi t 1
Wi t
Ri t : 11
Li t 1

If increased floor area ratio is larger than the control value, the model goes to [STEP 2]
and adjusts the original unit in the district, and then estimates the sales floor area again. If
226 N. Satani et al.

the ratio is still larger than the control value, it considers the possibility of changing the
regulations for planned big projects, revises the planned data, goes back to [STEP 1], and
estimates the number of employees again.
This completes the description of the model.

APPLICATION OF THE MODEL TO THE FUKUOKA METROPOLITAN AREA

The model will now be applied to the Fukuoka metropolitan area. This area consists of
seven cities, 14 towns, and a village around Fukuoka City, the central business city on
Kyushu Island, located in the southern part in Japan. The population of this area was
about two million in 1996 and the sales floor area of retail facilities in this area was about
2.1 million square meters in 1994. The districts in the Fukuoka area are shown in Figure 3.
It is assumed that each district is represented as a node and each node is linked with
neighboring nodes to make up the network structure. The network for the Fukuoka
metropolitan area is shown in Figure 4.

FIGURE 3. Object of the application.

 Commercial Facility Location Model 227

FIGURE 4. Network on Fukuoka urban area.

Input Data
The required input data are shown in Table 1. The population, area, number of
employees of each type, sales floor area of each type, road distance between neighboring
districts (m), the railway distance (expressed in terms of the road distance), and the OD
(Origin and Destination) information for each type of retail good are required. These data
were classified by the Japan industrial standard classification as is shown in Table 2. The
total floor area, the land-use area, and the controlled floor area ratio are used to check the
permissible values in [STEP4]. The planned data includes: (1) the population in 1995, 2000,
2005, and 2010; (2) the sales floor area of large-sized stores which are planned until the
year 2000; and (3) and the railway distance by subway number three which will open in
2006.

Parameter Estimation
Required parameters were first estimated by using the observed data for 1994 and the
Modified Huff Model and multiple regression analysis.
Parameters for the Modified Huff Model. The l and k parameters in Eq. (2) must first be
estimated. In addition, because the time distance will be shortened by improvements to the
railway network, a time-distance parameter a is used to estimate the relationship between
the road time distance and the railway time distance. The l, k, and a parameters were
228 N. Satani et al.

Table 1. Input Data

DATA on each statistical district

No. Item Type Observed DATA Planned DATA

Name 1985 1988 1991 1994 1995 2000 2005 2010

1 Population * * * * * * * *
2 Area *
3 Employees Convenience * * * *
4 Employees Shopping * * * *
5 Sales oor area Convenience * * *
6 Sales oor area Shopping * * *
7 Road distance * * * * *
8 Rail-way distance * * * * *
9 OD Convenience *
10 OD Shopping *
11 Total oor area *
12 Land-use area *
13 Controlled oor area ratio * *

``*'' shows given data; OD: Origin and destination.

Table 2. Retail Categories Used in the Model

Type No. Name of retail trade No. Name of retail trade

Shopping 541 Kimono, cloth, bedding 579 Other utensils, xtures

542 Male clothing 582 Agricultural things
543 Female and children's clothing 584 Books, stationery
544 Shoes, footwear 585 Sporting goods, toy, amusement
549 Other textiles, Clothes, personal thing things, musical instrument
562 Bicycle (including motorbike) 586 Camera, photographic materials
571 Furniture, ttings, mat 587 Watch, glasses, optical instrument
573 China and porcelain, glassware 588 Secondhand article
574 Household machine and utensils 589 The others
531 Department store 539 Other various commodity

Convenience 551 Various food 557 Confectionery, bread and bun

552 Liquor, seasoning 558 Rice
553 Meat 559 Other food and drink
554 Fish 572 Iron goods, household goods
555 Dry foods 581 Medicines, cosmetics
556 Vegetables, fruit
561 Car 583 Fuel

estimated using Eq. (12) given by Hagishima et al. (1987) and minimizing the value of ' in
this equation.
The estimation process for the l, k and a parameters for convenience goods is shown in
Figure 5. The corresponding process for estimating the shopping-goods parameters is
shown in Figure 6. The procedure calculates l and k first by fixing a, then a is calculated by
fixing l and k. The parameters were estimated again by repeating this procedure until the
values converged. The parameter l for estimating population potential in the next section
has this value.
 Commercial Facility Location Model 229

FIGURE 5. Estimation of l, k and a (convenience).

FIGURE 6. Estimation of l, k and a (shopping).

Table 3. Parameters for the Modied Hu Model

Estimation of l, k and a

Type Parameter

  a

Convenience 1.05 3.57 1.53

Shopping 1.49 1.41 1.01
 230

Table 4. Comparison of the Observed and Estimated Values (Convenience Goods)

Origin Destination 100 200 300 400 500 600 700 Sum

No. Name Higashi-ku Hakata-ku Chuo-ku Minami-ku Nishi-ku Jonan-ku Sawara-ku Chikushi area Kasuya Munakata Itoshima
area area area

100 Higashi-ku EST 0.862 0.081 0.008 0.003 0.001 0.001 0.001 0.002 0.042 0.001 0.000 1.000
OBS 0.893 0.012 0.030 0.000 0.000 0.000 0.007 0.000 0.059 0.000 0.000 1.000
200 Hakata-ku EST 0.044 0.786 0.055 0.050 0.000 0.001 0.001 0.057 0.005 0.000 0.000 1.000
OBS 0.000 0.644 0.078 0.091 0.000 0.000 0.004 0.127 0.057 0.000 0.000 1.000
300 Chuo-ku EST 0.003 0.063 0.827 0.019 0.001 0.069 0.017 0.001 0.000 0.000 0.000 1.000
OBS 0.000 0.012 0.863 0.041 0.000 0.036 0.048 0.000 0.000 0.000 0.000 1.000
400 Minami-ku EST 0.002 0.062 0.059 0.818 0.001 0.033 0.002 0.023 0.001 0.000 0.000 1.000
OBS 0.000 0.000 0.049 0.848 0.004 0.057 0.000 0.042 0.000 0.000 0.000 1.000
500 Nishi-ku EST 0.005 0.013 0.015 0.007 0.820 0.009 0.087 0.004 0.003 0.000 0.037 1.000
OBS 0.000 0.000 0.000 0.011 0.948 0.000 0.033 0.000 0.000 0.000 0.009 1.000
N. Satani et al.

600 Jonan-ku EST 0.001 0.006 0.128 0.043 0.002 0.781 0.037 0.002 0.001 0.000 0.000 1.000
OBS 0.000 0.000 0.142 0.000 0.000 0.744 0.115 0.000 0.000 0.000 0.000 1.000
700 Sawara-ku EST 0.002 0.008 0.027 0.006 0.029 0.029 0.895 0.003 0.001 0.000 0.000 1.000
OBS 0.000 0.000 0.079 0.008 0.045 0.071 0.797 0.000 0.000 0.000 0.000 1.000
Chikushi EST 0.002 0.071 0.012 0.144 0.001 0.004 0.002 0.762 0.002 0.000 0.000 1.000
area OBS 0.000 0.021 0.020 0.025 0.000 0.000 0.000 0.934 0.000 0.000 0.000 1.000
Kasuya EST 0.143 0.030 0.010 0.007 0.001 0.002 0.003 0.017 0.767 0.019 0.000 1.000
area OBS 0.058 0.037 0.024 0.000 0.000 0.000 0.000 0.010 0.853 0.018 0.000 1.000
Munakata EST 0.014 0.005 0.003 0.002 0.001 0.001 0.001 0.002 0.084 0.887 0.000 1.000
area OBS 0.000 0.000 0.015 0.000 0.000 0.000 0.000 0.000 0.100 0.885 0.000 1.000
Itoshima EST 0.007 0.016 0.016 0.009 0.085 0.007 0.018 0.006 0.005 0.001 0.830 1.000
area OBS 0.000 0.000 0.020 0.000 0.255 0.000 0.000 0.000 0.000 0.000 0.726 1.000
 Table 5. Comparison of the Observed and Estimated Values (Shopping Goods)

Origin Destination 100 200 300 400 500 600 700 Sum

No. Name Higashi-ku Hakata-ku Chuo-ku Minami-ku Nishi-ku Jonan-ku Sawara-ku Chikushi Kasuya Munakata Itoshima
area area area area

100 Higashi-ku EST 0.263 0.092 0.391 0.025 0.019 0.008 0.034 0.064 0.074 0.023 0.007 1.000
OBS 0.222 0.101 0.614 0.000 0.000 0.000 0.007 0.005 0.051 0.000 0.000 1.000
200 Hakata-ku EST 0.028 0.215 0.557 0.036 0.011 0.006 0.024 0.099 0.018 0.004 0.003 1.000
OBS 0.012 0.193 0.602 0.032 0.000 0.000 0.003 0.138 0.019 0.000 0.000 1.000
300 Chuo-ku EST 0.012 0.057 0.770 0.028 0.014 0.016 0.057 0.033 0.008 0.003 0.003 1.000
OBS 0.000 0.022 0.890 0.016 0.000 0.008 0.063 0.000 0.000 0.000 0.000 1.000
400 Minami-ku EST 0.019 0.089 0.482 0.173 0.019 0.022 0.037 0.131 0.017 0.006 0.005 1.000
OBS 0.008 0.036 0.751 0.171 0.000 0.000 0.000 0.034 0.000 0.000 0.000 1.000
500 Nishi-ku EST 0.026 0.057 0.362 0.028 0.241 0.017 0.118 0.071 0.023 0.012 0.045 1.000
OBS 0.000 0.026 0.589 0.007 0.184 0.000 0.183 0.000 0.000 0.000 0.011 1.000
600 Jonan-ku EST 0.019 0.059 0.474 0.058 0.043 0.130 0.118 0.069 0.016 0.006 0.008 1.000
OBS 0.000 0.010 0.756 0.019 0.000 0.072 0.143 0.000 0.000 0.000 0.000 1.000
700 Sawara-ku EST 0.020 0.052 0.382 0.031 0.101 0.031 0.285 0.062 0.017 0.007 0.012 1.000
OBS 0.000 0.005 0.496 0.000 0.013 0.000 0.486 0.000 0.000 0.000 0.000 1.000
Commercial Facility Location Model

Chikushi EST 0.015 0.072 0.230 0.042 0.013 0.008 0.023 0.568 0.019 0.006 0.005 1.000
area OBS 0.000 0.038 0.637 0.012 0.000 0.000 0.000 0.313 0.000 0.000 0.000 1.000
Kasuya EST 0.090 0.084 0.351 0.030 0.022 0.009 0.038 0.127 0.204 0.037 0.009 1.000
area OBS 0.020 0.099 0.524 0.000 0.000 0.000 0.000 0.022 0.330 0.006 0.000 1.000
Munakata EST 0.059 0.054 0.260 0.025 0.026 0.009 0.037 0.083 0.125 0.307 0.014 1.000
area OBS 0.000 0.082 0.397 0.000 0.000 0.000 0.000 0.000 0.108 0.413 0.000 1.000
Itoshima EST 0.030 0.055 0.310 0.029 0.085 0.014 0.066 0.083 0.029 0.017 0.283 1.000
area OBS 0.000 0.038 0.536 0.000 0.100 0.000 0.077 0.000 0.000 0.000 0.249 1.000
231
232 N. Satani et al.

 1=2
1
2
'  ij Tij ODij : 12
n

The results are shown in Table 3. For convenience goods, it was estimated that l was
1.05, k was 3.57, and a was 1.53. For shopping goods, it was estimated that l was 1.49, k
was 1.41, and a was 1.01. The comparison of the observed and estimated values is shown in
Table 4 (for convenience goods) and Table 5 (for shopping goods).
The data reveals a large gap between both values for Jonan-ku. The purchasing ratio for
convenience goods in the same district is high, about 80%. For shopping goods, the ratio is
very high in Chuo-ku, and lower in other districts. Two points can be made on the basis of
these results. Firstly, convenience-goods shopping is extremely attenuated as the distance
increases. Secondly, as the sales floor area accumulates, shopping goods purchases are
attracted into a district.
Parameters for the Multiple Regression Analysis. The a1, ak, and a0 parameter in Eq. (6a)
must also be estimated. As mentioned previously, four district ranks were defined.
Multiple regression analysis was used to estimate the parameters for each rank. The
analysis was done three times, using data for 1988, 1991, and 1994. The results for 1994
were found to be best. The parameters and the multiple correlation coefficients for each
rank are shown in Table 6. The multiple regression models were found to be very effective.

Changes to the Original Unit

The original unit was used to estimate the sales floor area from the employees' data as
described previously. Changes to this value can now be determined on the basis of data for
Fukuoka City. Figure 7 shows the changes to the original unit from 1985 to 1994 for each
type of location. According to this figure, the original unit for the CBD and Sub Center
show a tendency to get smaller. On the other hand, it shows a tendency to get larger for the
other location types. The original unit has a very small value in the water front. This may
reflect the fact that there are not many retail facilities there, and most of them are small
stores handling food and drink. However, we think that these trends will generally
continue until the near future.

Table 6. Parameters for the Multiple Regression Analysis

Estimation of parameters

Case Regression coecients R

Type Rank a1 a2 a3 a0

Convenience CBD 0.00431 0.16082 0.28913 1.00000

Subcenter 0.00155 0.00418 0.03851 0.81610 0.89663
District 0.00158 0.00443 70.00644 1.38321 0.68712
Neighborhood 0.12287 0.00786 0.09726 0.96526
Shopping CBD 0.00663 0.09620 5.23050 1.00000
Subcenter 0.01440 0.01985 71.04473 0.83922
District 0.00650 0.03797 0.27011 0.94414
Neighborhood 0.06480 0.01116 0.03448 0.91584

R: Multiple correlation coecient.

 Commercial Facility Location Model 233

FIGURE 7. Change of the original unit.

Validity of the Model

It is now time to consider how well the derived parameters and estimated values replicate
reality. To do this, the observed and estimated values for the 1991 employment were
compared. Figure 8 shows the correlation between the observed and estimated values. The
coefficient of determination is 0.9946 which indicates that the model does a very good job
of replicating the observed values.
Estimating the Sales Floor Area. The sales floor area in 1995 were then estimated by
applying the Modified Huff Model and the multiple regression analysis to the estimated

FIGURE 8. Correlation between observed value and estimated value.

234 N. Satani et al.

population for this period according to steps shown in Figure 2. The value was then
estimated by applying the checks on the permissible value. The sales floor areas were then
projected to the year 2010 at five years intervals from 1995.
Modified Huff Model. Table 7 shows the estimated values for the Modified Huff Model.
The observed values for Fukuoka City in 1994, were 374,693 m2 for convenience goods,
954,205 m2 for shopping goods, for a total of 1,328,898 m2. The projected values for 2010
were 527,366 m2 for convenience goods, 1,337,324 m2 for shopping goods, and 1,864,690

Table 7. Projected Value Using Modied Hu Model

Administrative district Observed value in 1994 (m2) Projected value in 2010

Convenience Shopping Sum Convenience Shopping Sum

Higashi-ku 62,212 115,034 177,246 95,501 163,100 258,601

Hakata-ku 73,383 189,186 262,569 97,858 242,458 340,326
Chuo-ku 59,714 306,867 366,581 77,292 469,998 547,290
Minami-ku 60,771 106,980 167,751 77,944 131,340 209,284
Nishi-ku 39,229 70,351 109,580 63,666 118,311 181,977
Jonan-ku 33,027 45,710 78,737 43,983 57,899 101,882
Sawara-ku 46,357 120,077 166,434 71,111 154,220 225,330

Sub Total in Fukuoka City 374,693 954,205 1,328,898 527,366 1,337,324 1,864,690
Chikushi Area 87,753 223,384 311,137 128,446 356,593 485,039
Kasuya Area 60,358 154,196 214,554 92,381 239,311 331,692
Munakata Area 34,312 89,140 119,452 53,284 136,376 189,660
Itoshima Area 23,957 47,344 71,301 52,160 70,191 122,351
Sub Total around Fukuoka City 206,380 510,064 716,444 326,271 802,471 1,128,742
Total in Fukuoka Urban Area 581,073 1,464,269 2,045,342 853,637 2,139,795 2,993,432

Table 8. Projected Value Using Multiple Regression Analysis

Administrative district Observed value in 1994 (m2) Projected value in 2010

Convenience Shopping Sum Convenience Shopping Sum

Higashi-ku 62,212 115,034 177,246 72,415 155,103 227,518

Hakata-ku 73,383 189,186 262,569 85,380 220,880 306,260
Chuo-ku 59,714 306,867 366,581 106,838 437,510 544,348
Minami-ku 60,771 106,980 167,751 78,373 119,928 198,301
Nishi-ku 39,229 70,351 109,580 52,529 115,018 167,547
Jonan-ku 33,027 45,710 78,737 41,950 59,578 101,528
Sawara-ku 46,357 120,077 166,434 79,697 157,186 236,883

Sub Total in Fukuoka City 374,693 954,209 1,328,898 517,183 1,265,202 1,782,385
Chikushi Area 87,793 223,384 311,137 140,019 392,499 532,518
Kasuya Area 60,358 154,196 214,554 88,521 245,460 333,982
Munakata Area 34,312 85,140 119,452 40,204 127,127 167,331
Itoshima Area 23,957 47,344 71,301 25,776 55,502 81,277
Sub Total around Fukuoka City 206,380 510,064 716,444 294,521 820,587 1,115,108
Total in Fukuoka Urban Area 581,073 1,464,269 2,045,342 811,704 2,085,789 2,897,493
 Commercial Facility Location Model 235

m2 for the total. Increases of about 15 ha for convenience goods, about 38 ha for shopping
goods, or a total of about 53 ha are expected.
The observed values in the neighborhood of Fukuoka City for 1994 are 206,380 m2 for
convenience goods, 510,064 m2 for shopping goods, for a total of 716,444 m2. The
projected values for 2010 are 326,271 m2 for convenience goods, 802,471 m2 for shopping
goods, and 1,128,742 m2 for the total. Increases of about 12 ha for convenience goods,
about 29 ha for shopping goods, or a total of about 41 ha are expected.
An increase of about 94 ha is expected for the entire Fukuoka metropolitan area. This is
a larger value than was obtained by using Multiple Regression Analysis, which suggests
that it is an upper limit. It is expected that an increase of the sales floor area in Fukuoka
City is larger than it is around the city. As was mentioned above, the value obtained by the
Modified Huff Model was relatively low near the border of the study area.
Multiple Regression Analysis. Table 8 shows the estimated values for the multiple
regression analysis. The estimated values for Fukuoka City 2010, were 517,183 m2 for

FIGURE 9. Sales floor area in 1994 (convenience).

236 N. Satani et al.

convenience goods, 1,265,202 m2 for shopping goods, for a total of 1,782,385 m2. Increases
of about 14 ha for convenience goods, about 31 ha for shopping goods, and about 45 ha
for the total are expected. The projected values for 2010 in the neighborhood of Fukuoka
City were 294,521 m2 for convenience goods, 820,587 m2 for shopping goods, for a total of
1,115,108 m2. Increases of about 9 ha for convenience goods, about 31 ha for shopping
goods, and about 40 ha for the total are expected.
A total increase of about 85 ha is expected for the entire Fukuoka metropolitan area. It
is expected that the increase of the shopping floor area outside Fukuoka City is almost the
same as within the city. This shows a drastic increase in the shopping floor area in the
suburbs.

FIGURE 10. Sales floor area in 2010 (convenience).

 Commercial Facility Location Model 237

Trends in the Sales Floor Area Distribution

Trends in the distribution of the floor area will now be examined by considering the
estimated values from the Modified Huff Model.
The observed shopping area value for convenience shopping in 1994 is shown in Figure
9. This figure indicates that there are high values in and near the CBD and that the figure
decreases as one moves away from the CBD. The projected value for 2010 is shown in
Figure 10. Compared to 1994, a high density district appears in Chuo-ku and a part of
Jonan-ku and Sawara-ku. Furthermore, there are a few high density districts in the south-
east such as Kasuga City.
The growth rate from 1994 to 2010 is shown in Figure 11. In Fukuoka City, districts
with high growth rates over 60% are expected to be found in the south-east and the south-
west, 5 km away from the CBD. This high growth rate probably results from the opening
of the new subway. However, it is more remarkable that high growth districts are also
found around Fukuoka City such as in Kasuya Town, Shime Town, Sue Town, Kasuga

FIGURE 11. Area growth rate (convenience).

238 N. Satani et al.

City, and Onojo City. They are districts whose population increases in recent years make
them attractive for convenience shopping.
The observed shopping area values for shopping goods are shown in Figure 12. This
figure indicates that there are high density shopping districts near the border between
Chuo-ku and Hakata-ku; however, most of them are in Fukuoka City. These districts are
dispersed than those for the convenient goods.
The projected values for 2010 are shown in Figure 13. This figure indicates that Kasuga
City has a high shopping density as was the case for convenience goods. The high density
area extends to the north-east area of Koga town and Shingu town.
The growth rate from 1994 to 2010 is shown in Figure 14. This figure indicates the
districts in which the growth rate would increase the most and are located far from the
CBD. Compared to the convenience goods, there are high growth districts in more distant
areas such as Dazifu city and Chikushino City.

FIGURE 12. Sales floor area in 1994 (shopping).

 Commercial Facility Location Model 239

FIGURE 13. Sales floor area in 2010 (shopping).

CONCLUSIONS

This study developed a simulation model for studying radical changes in the location of
retail facilities and applied the model to the Fukuoka metropolitan area. The study results
suggest the following five conclusions. First, the Modified Huff Model can be used to
estimate the number of employees by assuming that the number of employees is in
proportion to the number of inhabitants who go shopping in a district. Second, multiple
regression analysis can be used to estimate the number of employees by assuming that the
number of employees is proportional to the population in a district and neighboring
districts, and inversely proportional to the time distance between the districts. Third, the
estimated parameters for each retail type can be used to estimate location trends for each
type of retail good. Fourth, the results of the application to the Fukuoka metropolitan
area indicate that the model has high validity. Finally, the model results for 2010 suggested
that the demand for retail facilities will increase substantially in the suburbs.
240 N. Satani et al.

FIGURE 14. Area growth rate (shopping).

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