Spatial Structure of Cities and Distribution of Retail Sales - Analysis based on a Potential NEG Model

This paper aims to estimate the retail sales turnover in cities based on a potential New Economic Geography (NEG) model, addressing how (the distribution of) sales turnover is explained by the spatial structure of cities. This also takes into account the population distribution, by treating the spatial distribution of population and retail sales turnover in the cities by district and street (cho and chome) data. The cities covered are prefectural cities excluding government ordinance cities located in provincial areas.

With respect to the impact of improvements in inner-city transportation, bearing in mind the effects of the compact city policy, we conducted a simulation analysis with the city of Okayama using standard parameters. One finding of the analysis was that businesses in suburban areas will increase their sales turnover more readily as a result of reducing the distance resistance within the city, while inner-city businesses will conversely decrease their sales turnover. The other finding was that if, for example, approximately 10% of the population and businesses in suburban areas are shifted to the inner city, the sales turnover will increase by about 3.4% for businesses in the inner city, but decline by about 2% for businesses in suburban areas.