Modeling Location Decisions of Office Firms

Abstract

Firm location models constitute a significant element of integrated land use and transportation models because the behavior of individuals and households is influenced by employment location. This paper examines office firm location models, both for new and relocating firms, to identify ways to improve their estimation and application. The results of the paper suggest that introduction of anchor points, such as the firm current location and the owner household location, significantly improve the estimation of office location models. A generation procedure for choice sets is then shown to improve the model's ability to replicate the decision behavior of office firms and thus provides a way to increase efficiency in the application of the model.