Firm Location in the MEPLAN Model of Sacramento

Abstract

MEPLAN land use and transportation-interaction models traditionally include models of business-location choice. The mechanisms in the model that allow for realistic aggregate assignment of firms to zones, and the resulting impact that firm location has on the entire modeling system, are described. The models use a form of logit function to allocate production activities to zones. Interdependencies in the Social Accounting Matrix, together with trip- and land-cost data and usage rates, generate a utility function for the attractiveness of purchasing a given sector’s output from a given zone. The alternative specific constants and the dispersion parameter are estimated in calibration, based primarily on cost data, trip-length distributions, and arrangement of activity in a calibration year. Results from a model of Sacramento show the various features and strengths of the model, while pointing out some weaknesses and potential pitfalls. The strengths include the realistic representation of current and continuing patterns, the close linkages between different industry and household types, and the market-based nature of the model. The weaknesses include the aggregate nature of the model and the possibility of difficulties in establishing realistic, alternative, specific constants.