Scandinavian Working Papers in Economics

HUI Working Papers,
HUI Research

No 78: Distance measure and the p-median problem in rural areas

Kenneth Carling , Mengjie Han , Johan Håkansson () and Pascal Rebreyend
Additional contact information
Kenneth Carling: HUI Research, Postal: The Swedish Research Institute of Trade (HUI), Regeringsgatan 60, 103 29 Stockholm, Sweden, and School of Technology and Business Studies, Dalarna University, SE-791 88 Falun, Sweden
Mengjie Han: School of Technology and Business Studies, Postal: Dalarna University, SE-791 88 Falun, Sweden
Johan Håkansson: School of Technology and Business Studies, Postal: Dalarna University, SE-791 88 Falun, Sweden
Pascal Rebreyend: School of Technology and Business Studies, Postal: Dalarna University, SE-791 88 Falun, Sweden

Abstract: The p-median model is used to locate P facilities to serve a geographically distributed population. Conventionally, it is assumed that the population patronize the nearest facility and that the distance between the resident and the facility may be measured by the Euclidean distance. Carling, Han, and Håkansson (2012) compared two network distances with the Euclidean in a rural region with a sparse, heterogeneous network and a non-symmetric distribution of the population. For a coarse network and P small, they found, in contrast to the literature, the Euclidean distance to be problematic. In this paper we extend their work by use of a refined network and study systematically the case when P is of varying size (2-100 facilities). We find that the network distance give as good a solution as the travel-time network. The Euclidean distance gives solutions some 2-7 per cent worse than the network distances, and the solutions deteriorate with increasing P. Our conclusions extend to intra-urban location problems.

Keywords: dense network; location model; optimal location; simulated annealing; travel time; urban areas

JEL-codes: C18; C61; R42; R50

12 pages, December 4, 2012

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