Pub. Date:
Springer Netherlands
Economies of Scale, Transport Costs and Location: Studies in Applied Regional Science Series / Edition 1

Economies of Scale, Transport Costs and Location: Studies in Applied Regional Science Series / Edition 1

by George Norman


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The presence of nonconvexities does severe damage to conventional theories of the firm and of the individual. The essential contribution of location theory, however, is in a world in which there are such nonconvexities. If resources are distributed evenly and the usual convexity assumptions made, then economic activity would be distributed evenly; there would be no concentration of pro­ duction. Thus the statement that is usually made, that the standard results carry over to a world in which there is spatial choice, is too weak and fails to capture the essence oflocation theory. Nevertheless, we must also concede that, while the introduction of the spatial dimension is interesting and fruitful when (perhaps only when) there are non­ convexities, space should not be thought of as a panacea whereby problems­ those associated with economies of scale, for example -can be made to disap­ pear. There is no guarantee, for example, that production units will be operated in convex regions of their total cost curves, even if they are constrained to oper­ ate in a 'space economy'. These considerations led to the conclusion that the role of spatial choice and the determinants of such choice would be best analysed by case study. This book is one such study. It is based on my doctoral dissertation at the University of Cambridge, fmanced by a grant from the Social Science Research Council.

Product Details

ISBN-13: 9780898380170
Publisher: Springer Netherlands
Publication date: 10/31/1979
Series: Studies in Applied Regional Science , #16
Edition description: 1979
Pages: 206
Product dimensions: 6.10(w) x 9.25(h) x 0.36(d)

Table of Contents

1 Introduction.- 1.1 Introduction.- 1.2 Least Cost Theory.- 1.3 Central Place and Interdependence Theories.- 1.4 Other Approaches.- 1.5 Conclusion.- 2 Objectives of the Study.- 2.1 Introduction.- 2.2 Description of the Theoretical Model.- 2.3 Comparison with Planning Models.- 2.4 Objectives of the Study.- 3 Static Model Assuming Constant Returns to Scale.- 3.1 Introduction.- 3.2 Locational Framework, Production and Transport Activities.- 3.3 Disposal Activities.- 3.4 Constraints Imposed by Market Conditions.- 3.5 Costs.- 3.6 Specification of the Programming Problem.- 4 The Static Model with Increasing Returns.- 4.1 Introduction.- 4.2 Economies of Scale.- 4.3 Respecification of the Programming Problem: Part I.- 4.4 Quasi Production Activities.- 4.5 Total Production Costs for the Production Unit.- 4.6 Respecification of the Programming Problem: Part II.- 4.7 Combination of Production Activities.- 4.8 Computational Problems.- 5 Case Study—The Cement Industry.- 5.1 Introduction.- 5.2 Structure of the UK Industry.- 5.3 Cost Structure of the Industry.- 5.4 Spatial Characteristics of the Market Area.- 6 Solution of the Static Cement Study.- 6.1 Introduction.- 6.2 The Calculated Optimum for the Static Study.- 6.3 Sensitivity Analysis.- 6.4 Comparison of Actual and Calculated Distributions.- 6.5 Conclusion.- 7 The Multiperiod Version of the Model.- 7.1 Introduction.- 7.2 Restatement of the Objective.- 7.3 Decision Variables.- 7.4 Cost Parameters.- 7.5 Edge Effects Associated with Capital Costs.- 7.6 The Multiperiod Programming Problem.- 7.7 Case Study: Introduction.- 7.8 Market Area.- 7.9 Cost Estimates.- 7.10 Solution of the Multiperiod Model.- 8 A Competitive Model Assuming Free Entry.- 8.1 Introduction.- 8.2 The Model.- 8.3 Application to the Cement Study.- 8.4 Solution of the Model.- 8.5 The Model Assuming Elastic Demand.- 8.6 Solution Assuming Elastic Demand.- 8.7 Conclusions.- 9 Conclusions.- 9.1 Introduction.- 9.2 Programming Models and Planning.- 9.3 The Nature of Economies of Scale.- 9.4 Locational Influences: The Static Model.- 9.5 Locational Influences: The Multiperiod Model.- 9.6 The Competitive Model.- 9.7 The Importance of Transport Costs.- Appendices.- A Additional Notation for Chapter 3.- B Summary of United Nations (1963) Study Data.- C General Data for the U.K. and U.S. Cement Industries.- D Regional and County Analysis of Cement Deliveries (1965).- E Estimated Road Distances.- Notes.

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