Finance:Huff model
From HandWiki
In spatial analysis, the Huff model is a widely used tool for predicting the probability of a consumer visiting a site, as a function of the distance of the site, its attractiveness, and the relative attractiveness of alternatives. It was formulated by David Huff in 1963.[1] It is used in marketing, economics, retail research and urban planning,[2] and is implemented in several commercially available GIS systems. Its relative ease of use and applicability to a wide range of problems contribute to its enduring appeal.[3]
The formula is given as:
[math]\displaystyle{ P_{ij}= \frac{A_j^\alpha D_{ij}^{- \beta}} {\sum_{k=1}^{n}A_k^{\alpha} D_{ik}^{- \beta}} }[/math]
where :
- [math]\displaystyle{ A_j }[/math]is a measure of attractiveness of store j
- [math]\displaystyle{ D_{ij} }[/math]is the distance from the consumer's location, i, to store j.
- [math]\displaystyle{ \alpha }[/math] is an attractiveness parameter
- [math]\displaystyle{ \beta }[/math] is a distance decay parameter
- [math]\displaystyle{ n }[/math] is the total number of stores, including store j
References
- ↑ Huff, David L. (1963). "A Probabilistic Analysis of Shopping Center Trade Areas". Land Economics 39 (1): 81–90. doi:10.2307/3144521. ISSN 0023-7639. https://www.jstor.org/stable/3144521.
- ↑ "Huff, David | AAG". http://www.aag.org/cs/membership/tributes_memorials/gl/huff_david.
- ↑ Dramowicz, Ela (2005-07-03). "Retail Trade Area Analysis Using the Huff Model". https://www.directionsmag.com/article/3207.
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