SPATIAL INTERACTION (or GRAVITY) MODEL

Given several population centers and several retail or service facilities, estimate the
proportion of demand from each population center that is served by each facility.
n = number of facilities
Sj = size of facility j (e.g., ft2)
Ci = total demand at city (population center) i (e.g., $/yr)
Tij = travel time from city i to facility j
Pij = proportion of demand from city i served by facility j
Eij = estinated demand from city i served by facility j
Sj
2

Ti j
Pi j = n
Sj

j=1

Ti j

E i j = Pi j C i
2

Example: Consider building a new shopping center at RP. Suppose this will compete
directly with two other major shopping centers: The GA and NW.
Size (Sj):

GA
NW
RP

Revenues (Ci):

1,300,000 square feet

1,700,000 square feet
1,500,000 square feet
N
C
W
S
Total

$ 15 million/year
$ 20 million/year
$ 25 million/year
$ 10 million/year
$ 70 million/year

Travel Time (minutes):

to

fro
m

Tij
N
C
W
S

GA
40
15
40
40

NW
25
25
50
30

RP
30
30
45
20

(1)
(2)
(3)
(4)

Calculate Sj /Tij2.
Sum for each city (to get denominator of Pij).
Calculate Pij.
Calculate Eij.

fro
m

Sj /Tij2

GA

NW

to
RP

813

2720

1667

5200

5778

2720

1667

1016
5

813

680

741

2234

813

1889

3750

6452

to

fro
m

Pij

GA

NW

RP

.156

.523

.321

.568

.268

.164

.364

.304

.332

.126

.293

.581

to

from

Eij

GA

NW

RP

2.34

7.845

4.815

11.36

5.36

3.28

9.1

7.6

8.3

1.26

2.93

5.81

24.06

23.74

22.2

Column sum

Total estimated revenue for R = $ 22.2 million/year.