Hotelling Theory
and
Gravity Model
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Chapter 12: Services
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Describes reasons for agglomeration of
business
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https://www.youtube.com/watch?v=jILgxeN
BK_8
Hotelling Theory of
Optimal Location


Developed based on Newton’s Laws of
Gravitational Pull
Used to predict degree of interaction between
two places





Traffic flow
Migration
Number of people likely to use one central place
Reilly’s law of gravitational pull shows
breaking point of consumers (range/threshold)
Sometimes loosely referred to as distance decay
Gravity Model