Quotation Pennerstorfer, Dieter, Yontcheva, Biliana. 2019. How to Draw the Line: A Note on Local Market Definition. JKU Linz Working Papers.




This article presents a novel method of market delineation, which generates virtually isolated residential clusters using data on the spatial distribution of population. The performance of this approach is evaluated by contrasting it with traditional delineation techniques based on municipal boundaries. The estimation of simple entry models for five industries shows that markets defined using micro-level residence information perform better in terms of reducing cross-border spatial spillovers and predicting the equilibrium number of firms on the market more accurately. Additionally, the estimated entry threshold ratios using this method successfully reflect our expectations based on ex-ante knowledge about the investigated industries.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title How to Draw the Line: A Note on Local Market Definition
Title of whole publication JKU Linz Working Papers
Year 2019
URL http://www.economics.jku.at/papers/2019/wp1917.pdf
JEL L13, L11, R32


Yontcheva, Biliana (Details)
Pennerstorfer, Dieter (JKU Linz, Austria)
Department of Economics (Weiss) (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
5323 Econometrics (Details)
5329 Economics of location (Details)
5370 Industrial economics (Details)
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