Retail Location and Transit: An Econometric Examination of Retail Location in Prince George’s and Montgomery County, Maryland

Abstract

Transit oriented development (TOD) is a widely accepted policy objective of many jurisdictions in the United States. There is both anecdotal and empirical evidence to suggest that the vitality of TODs and the transit boardings from any TOD depends significantly on the extent of retail development in the transit station area. We focus in this paper, on the determinants of retail location in two counties, Montgomery County and Prince George’s County, Maryland, with a particular focus on the influence of proximity to rail transit stations. We used data from two counties in the Washington DC suburbs to construct measures of transit and retail accessibility and constructed an econometric model to estimate the relationship between urban contextual factors and retail firm locations. The results from our analysis provide empirical support for the notion that retail firms are attracted to locations with high levels of transit accessibility. By extension, these findings suggest that investments in transit—particularly fixed rail transit—may be an effective method for stimulating retail development in metropolitan areas.