The recent index proposed in Ellison & Glaeser (1997) is now well established as the preferred method for measuring localization of economic activity. We critically review this index and build on the McFadden’s Random Utility (Profit) Maximization framework to develop an alternative measure...

Given its sound theoretical underpinnings, the Random Utility Maximization-based conditional logit model has been the methodological basis for applied research on industrial location decisions. However, in practice, the implementation of this methodology presents problems. A notable one is the...