Barry Lentnek

SPATIAL CHOICE IN CONSUMER BEHAVIOR: TOWARDS A CONTEXTUAL THEORY OF DEMAND

This article represents an attempt to reformulate the spatial economics of consumer behavior. It is apparent that alternative approaches toward the explanation of consumer choice of destinations for the journey-to-shop are needed at this point in the development of theory in geography.

The Role of Contact Requirements in Producer Services Location

The authors explore the role of contact requirements in the locational tendencies of producer service establishments. Empirical evidence from two demand-side surveys suggests that close proximity between vendors and clients is required for contracts that involve frequent buyer–seller interaction (face-to-face linkages). These types of contracts are shown to be relatively low duration and/or low cost in nature. Specific activity classes that exhibit these characteristics include data processing, computer software development, product testing, and equipment repair services. In contrast, more advanced (and often more expensive) services such as management consulting and industrial design exhibit lower levels of contact sensitivity. The paper concludes with a discussion of forthcoming prospects for the development of a contact-based model of producer service location.

The Optimum Size of a Producer Service Firm Facing Uncertain Demand

In this paper we present a theory of optimum size and number of clients for a producer service firm performing maintenance and repair services for clients in the manufacturing sector. The theory holds that scale economies vary directly with the level of contact requirements for service delivery. This is illustrated by a model of a monopoly repair specialist in which frequency of breakdown (and therefore client demand for service) is stochastic. Comparative statics are used to draw testable hypotheses from the model which, if extended to a multisite case, may serve as a portion of a general model of producer service location.

Optimum Producer-Service Location

Presented in this paper is a formal economic model that identifies the optimal intraurban location for a producer-service vendor that caters to the technical needs of spatially dispersed clients in the manufacturing sector. Two major components are incorporated into the model. The first of these describes the oft-cited externalization process among industrial firms, where in-house service provision is selectively abandoned in favor of out-sourcing. The second component describes a vendor location process based on profit maximization, where buyers and sellers are optimally located relative to one another. Normative modeling propositions are then compared with current empirical streams in the literature on producer-service location, the role of manufacturing demand, and the process of selective vertical disintegration among industrial firms. The paper is concluded with a brief research agenda for modeling the intraurban locational behavior of specialist firms in the producer services.

A Contextual Theory of Demand: Beyond Spatial Analysis in Economic Geography

The Contextual Theory of Demand is a consistent economic explanation of the ways in which a household allocates its time within a geographical setting so as to maximize its satisfaction. The theory describes the spatial behavior of a household which buys a variety of goods and services at a number of locations when faced with uncertainty concerning store prices. The theory does this by replacing the concept of spatial price with the concept of contextual cost. It views geographical behavior as explicable only from a dynamic perspective. Contextual analysis is simultaneously spatial and dynamic. It is the first location theory to abandon the assumption of the homogeneous plain. The Contextual Theory of Demand accepts as input any population geography, distribution of stores, and transport system to produce an explanation of a predicted pattern of consumption and shopping trips, and a corresponding geography of demand.