Trade Area Definition and Calculation

Real estate market analysis begins with the correct spatial delineation of the geographic market trade area. The less accurate the spatial delineation, the greater the error introduced into subsequent analysis such as calculation of competitive supply, demand and absorption. Advancements in geospatial technology provide for greater ease of execution of traditional methods of calculation of market areas; however trade area estimation methods have not changed along with advancements in geospatial technology. We bridge the gap between geospatial technological advances and analysts’ needs for improved accuracy in spatially delineating trade areas. The solution requires a software interface that integrates complex statistical analysis with geospatial manipulation and visualization of geographic data. The algorithm is a composite of traditional methods and in that manner remains intuitive to decision makers. At the same time, because there are so many components to the algorithm, it would have been neither practical nor feasible to achieve the same accuracy as presented here with earlier technologies. The application is written in MapBasic. The executable MapInfo add-in can be downloaded and used by anyone with MapInfo GIS software on their Microsoft Windows based personal computer.