Store Location in Shopping Centers: Theory and Estimates

30 Pages Posted: 27 Dec 2006

See all articles by Charles C. Carter

Charles C. Carter

Florida Atlantic University

Kerry D. Vandell

University of California, Irvine - Paul Merage School of Business; University of California, Irvine School of Law

Abstract

This paper develops a formal theory of store location within shopping centers based on bid rent theory. The bid rent model is fully specified and solved with the objective function of profit maximization in the presence of comparative, multipurpose and impulse shopping behavior. Several hypotheses result about the optimal relationships between store types, sizes, rents, sales, and distances from the mall center. The hypotheses are tested and confirmed using data from a sample of 689 leases in eight regional and super-regional shopping centers, suggesting that a bid rent explanation is consistent with observed location patterns in malls.

Keywords: store location, shopping center, mall, shopping, store, bid rent

JEL Classification: C12, C31, C32, C35, C44, C51, C52

Suggested Citation

Carter, Charles C. and Vandell, Kerry D., Store Location in Shopping Centers: Theory and Estimates. Journal of Real Estate Research, Vol. 27, No. 3, 2006, Available at SSRN: https://ssrn.com/abstract=953798

Charles C. Carter

Florida Atlantic University ( email )

Boca Raton, FL 33431
United States

Kerry D. Vandell (Contact Author)

University of California, Irvine - Paul Merage School of Business ( email )

Paul Merage School of Business
Irvine, CA California 92697-3125
United States

University of California, Irvine School of Law ( email )

401 E. Peltason Dr.
Ste. 1000
Irvine, CA 92697-1000
United States

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