CASA Working Paper 223: Gravity Model Calibration by Rent

Abstract:

This paper shows how the location rents, inherent in the gravity model as balancing factors, are derived and estimated. We then show how the calibration of the model against the balancing factors using minimum J-divergence, gives an identical result to the more conventional equating of model and observed mean trip costs. The identification of accessibility with location rent is discussed and an example is given of the use of the method in deriving Airbnb  accessibilities to tourist destinations in London.

Authors: Robin Morphet, Zahratu Shabrina

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