The Generalized Costs of Relocation

The purpose of this chapter is to discuss the estimation of the generalized relocation cost parameters of the relocation model developed in chapter 3. The first three stages of the multistage estimation procedure outlined in chapter 4 (figure 4.1) are also included. The first section of the chapter discusses the concept of generalized relocation costs and questions raised about their effects in the literature. The estimation of intersubmarket generalized cost parameters by the cross-product ratio approach is described in the second section.1 Since generalized costs are the critical component that distinguishes spatial interaction gravity models, the estimating approach discussed in this section should be of far more general interest than the particular application of this study. The third section of the chapter encompasses the second and third stages of the multistage procedure. The third-stage estimation of intrasubmarket generalized cost parameters is of particular interest. The last section contains a general discussion of the implications of the empirical results and concluding remarks.