The selection of optimum plant sites for selected industries entering Houston



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The goals of this study are twofold: to develop a method for selecting the best site for establishments of the major industries entering Harris County, Texas and to measure the relative values assigned to different plant site characteristics by the locators representing the site selecting establishments. The key assumption is that previous to choosing Harris County as a location, a market study has been made including Harris County and alternative urban areas. This market study has included an attempt to measure the relevant demand function for the output of the establishment and in choosing Harris County an expected annual rate of production of the proposed establishment is implied. Using this assumption, it then can be argued that the profit maximizing site for a given establishment is that which minimizes total costs for the predetermined rate of output. The relevant aspects of the location theory of Isard, Richardson, and Greenhut are considered. The manner in which the technology of the establishment and the characteristics of the property in question interact to generate the value of situs is considered. The operational definition of situs, as used in this study is discussed. This definition of situs is used to develop a multiple aggression analysis as a tool to measure the value of situs. The main goal of the study is achieved by ranking the available properties in order of their preferability for each industry included in the case studies. An overriding weakness, which casts doubts on the empirical analysis, is the small number of observations in each industry group. This is made apparent in the results by the presence of large standard errors of estimates and the low t-values of the coeficients in the regression equations.