Delineating the Regional Market in Studies of Intercity Competition

Abstract

Urban theorists and researchers often identify interjurisdictional competition within a regional market as a factor in public policy decisions. Although empirical studies present various measures of interjurisdictional competition, they define the spatial contours of the "regional market" differently with no critical assessment of their delineations. We theoretically and empirically assess three measures of intercity competition, including two approaches commonly found in the literature, as well as a third, new measure using the concept of distance to identify the regional market area. For our empirical assessment, we regress each measure and a set of contextual variables on total city expenditures per capita using a random sample of U.S. cities. We conclude that all the measures of competition have some theoretical validity and influence city expenditures per capita as predicted, but we recommend one measure based on validity, reliability, data accessibility, and ease of computation.

Keywords:

• competition
• region
• measure
• policymaking