LOCATION THEORY AND REGIONAL

SCIENCE
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 LOCATION THEORY
Focused on the optimal location of industry given the costs of transporting raw
materials and final products

Alfred Weber (1929)

Transportation costs are influenced by weight and distance.

He assumes that demand is given and that firms seek to minimize the costs of
transporting raw materials and final goods to the market

Near
Weight losing weight of the raw material > the weight of the final product
Input Sources

Near
Weight gaining weight of the raw material < the weight of the final product
Consumer market
 LOCATION THEORY
William Allonso

The influence of assembly costs and distribution costs, the role of transshipment points, and the
implications of multiple raw material sources and irregularly shaped transportation networks
and market areas on optimal plant location
The limitations of the location theory approach, including its static orientation, its ignorance of
external scale economies, and the tendency of early theories to treat demand as exogenous.
 REGIONAL SCIENCE

Walter Isard
A branch of the social sciences that examines the impact of space on economic decision making

Methods of regional analysis: An introduction to regional science (1960). The text presents a
summary of the standard methodological approaches to analyzing regional economies.
Included in the discussion are traditional techniques such as comparative cost analysis, input
output analysis, linear and nonlinear programming, and gravity and spatial interaction models
in addition to more recent methods of analysis including spatial econometrics, computable
general equilibrium models, and spatial micro-simulation.
 REGIONAL SCIENCE
Walter Isard
A branch of the social sciences that examines the impact of space on economic decision making

Methods of regional analysis: An introduction to regional science (1960). The text presents a
summary of the standard methodological approaches to analyzing regional economies.
Included in the discussion are traditional techniques such as comparative cost analysis, input
output analysis, linear and nonlinear programming, and gravity and spatial interaction models
in addition to more recent methods of analysis including spatial econometrics, computable
general equilibrium models, and spatial micro-simulation.
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