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Habitat International 57 (2016) 110e120

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Habitat International
journal homepage: www.elsevier.com/locate/habitatint

Spatial access to pedestrians and retail sales in Seoul, Korea


Chang-Deok Kang
Dept. of Urban Planning and Real Estate, Chung-Ang University, 84 Heukseok-ro, Dongjak-gu, Seoul, 156-756, South Korea

a r t i c l e i n f o a b s t r a c t

Article history: The retail sector plays a significant role in urban economic development, smart growth policies with
Received 1 April 2016 mixed land use, and retail desert issues. In addition, urban policies and designs for pedestrian-friendly
Received in revised form urban settings have become a dominant paradigm to reshape urban environments. As retail sales
16 June 2016
depend considerably on the volume of neighborhood pedestrians, the link between pedestrian mobility
Accepted 19 July 2016
and retail sales has been a key issue in studies, designs, and economic development of urban areas.
Despite the importance of the topic, few empirical studies have examined how pedestrian volumes along
street networks affect retail prosperity in urban spaces. Hence, this study investigates the effect of
Keywords:
Pedestrian
accessibility and centrality to walking volume on retail sales in Seoul by considering pedestrian volumes
Accessibility and street network configuration concurrently. Multilevel regression models confirm that spatial access
Centrality to pedestrians has differing effects on retail sales according to the type of retail sector. Specifically, a
Retail sales higher accessibility to and visibility of retail stores for walkers tend to improve the sales performance of
Street all retail types. Further, the sales of the Medical Services and Education sectors are remarkably sensitive
Seoul to the combined effects of pedestrian and street configuration, unlike those of the three other sectors,
namely Food, Retail, and Services.
© 2016 Elsevier Ltd. All rights reserved.

1. Introduction Creating walkable cities has been an important urban issue


because such cities offer certain advantages such as lower auto-
The retail sector plays a significant role in urban economics and mobile usage, more opportunities for local shopping and social
spatial structures, smart growth policies with mixed land use, and cohesion, and improved health for citizens (Kang, 2015). Many ur-
retail desert issues. Several studies have confirmed that the ban researchers, planners, and designers have focused on the de-
development and decline of retail activities change local economic terminants of walkability and pedestrian-friendly cities (Talen &
well-being, spatial land-use patterns, and urban mobility (Glaeser, Koschinsky, 2013). Recently implemented urban policies and de-
Kolko, & Saiz, 2001; Lang, 2003). On the other hand, as cities face signs for such cities have provided a highly favorable urban setting
chronic and serious urban issues such as traffic congestion, energy for retail sales. While developing policies to address retail devel-
overconsumption, environmental pollution, and climate change, opment and walkability, it is necessary to understand the spatial
mixed land use has become an effective tool to facilitate the access relationship between retail economic performance and pedestrian
to different land use and to promote walking as an alternative to volume.
automobiles (Handy, 2005; Song & Knaap, 2004). Further, the ex- The endogeneity issues between pedestrian volumes and total
istence of retail deserts implies less access to retail stores in low- retail sales have been debated as an indicator of the urban eco-
income and socially disadvantaged areas (Schuetz, Kolko, & nomic fabric. Although the relationship between the two is inter-
Meltzer, 2012). As public goods, retail stores constitute local ame- active, and not unidirectional, most studies focus on the effects of
nities for residents and workers. Less access to retail stores gener- pedestrian flows and walking environments on retail locations and
ates severe social equity issues for the elderly, low-income groups, sales owing to the importance and power of walking behavior and
and disabled consumers (Guy, 2006). Accessibility to retail stores is environments in shaping a city (New York Department of
a key measure of the adequacy of retail services and must be Transportation, 2013; Sullivan & Adcock, 2002). Further, a few
considered in urban policies and designs that address retail deserts. policy studies have also confirmed that higher walking activity and
better walking conditions increase retail sales in the neighborhood
(Litman, 2014). Studies on the relationship between walking envi-
E-mail address: cdkang@cau.ac.kr. ronments and retail economic performance implicitly assume that

http://dx.doi.org/10.1016/j.habitatint.2016.07.006
0197-3975/© 2016 Elsevier Ltd. All rights reserved.
C.-D. Kang / Habitat International 57 (2016) 110e120 111

more pedestrian-friendly environments attract more walkers, study verified that locations with busier streets and higher building
generating higher retail sales. However, researchers are yet to density were favorable for retail and food stores (Sevtsuk, 2014).
arrive at a consensus that better walking conditions always in- The local contexts generate different connections between spatial
crease pedestrian volumes. Two recent studies on walking in Seoul patterns of retail and street network structure. While retail stores in
found different effects of walking environments on walking from older cities tend to cluster in main roads and streets, the stores in
those suggested by previous studies (Kang, 2015; Sung, Go, & Choi, newly planned towns are more likely to spread across planned
2013). Thus, empirical studies need to control for walking activities areas (Omer & Goldblatt, 2015).
and walking conditions concurrently. We need to examine the relationship between walking activities
A literature review reveals that few studies have investigated and retail sales, controlling for walking conditions and other fac-
the different effects of walking activities and walking conditions, tors, for several reasons. First, city leaders and citizens increasingly
controlling for other relevant variables. This study is unique in that recognize the influence of pedestrian behavior and environments
it attempts to analyze the effects of accessibility and centrality to on direct and indirect benefits of higher urban mobility, trans-
pedestrians on retail sales, controlling for walking conditions and portation cost savings, efficient land use, neighborhood livability,
urban environments. better public health, local economic development, and social eq-
As emphasized previously, walking, as an activity, and walk- uity. Second, creating pedestrian-friendly environments for urban
ability, as a condition for walking, are different issues (Litman, revitalization and sequentially increasing walking activities have
2003). Higher walkability does not always generate more local impacts on not only residents and local businesses but on a
walking. Thus, we review the relevant literature on both walkability city as a whole. Thus, it is critical to measure the positive and
and walking. Many studies estimate the effects of walkability on negative effects of creating effective urban designs for pedestrians
economic value in areas such as property value, personal health and to predict the outcomes of relevant urban policies and designs.
and income, mixed urban development, and retail sales. Recent Finally, as an indicator of local economic vitality, retail sales clearly
studies have shown that a walkable urban setting is associated with respond to changes in pedestrian volume and a walkable street
higher property value (Sohn, Moudon, & Lee, 2012). Further, a configuration.
higher Walk Score, which is a measure of walkability, increases the To summarize, while numerous studies show that walkability
value of residential and commercial property (Cortright, 2009; Pivo has a positive effect on neighborhood property value, personal
& Fisher, 2011). Other effects of walkable neighborhoods on eco- health, individual income, urban development, and retail sales, few
nomic value involve the foreclosure risk of households with more studies investigate how walking activities combined with the street
cars and a lower access to public transport (Moudon et al., 2006; configuration determines the health of local businesses. This un-
Rauterkus, Thrall, & Hangen, 2010). Furthermore, a walkable ur- explored hypothesis is empirically testable because walkable cities
ban setting leads to higher mixed land use and housing develop- and local economic vitality have been central issues to urban policy
ment (Ellen & Voicu, 2005; Tatian, Kingsley, Parilla, & Pendall, and design. Further, few studies have tested the combined effects of
2012). The section titled “Description of Variables” introduces the pedestrian volume and street network configuration on retail rev-
specific conditions for walking according to prior studies. enue by types.
While a few studies investigate the relationship between This study aims to fill this gap in the literature by analyzing the
walkable streets and the spatial variation of retail sales, most focus combined effects of pedestrian volume and street configuration.
on the association between street configuration and retail location Furthermore, we compare the various effects of spatial accessibility
for profit maximization. A walker-oriented street network config- and centrality to walking volume on retail sales in Seoul and test
uration with lesser automobile usage generates spatial variation in five unique spatial accessibility and centrality effects. To study the
retail turnover (Hass-Klau, 1993). As the location and economic combined effects of walking volume and street network layout, we
performance of retail stores depend on local pedestrian volume apply the spatial accessibility and centrality indices to identify the
along street networks, the effects are different between large and differing effects on retail sales under a single research framework.
small stores. On the other hand, a higher proximity to retail stores Moreover, we analyze the different effects of the five indices on
and owning bikes promote walking and cycling behavior (Krizek & retail sales according to the type of retail sector. Few studies have
Johnson, 2006). As pedestrian access to retail stores is important for attempted to separately analyze the effects of walking activities and
the economic performance of local businesses, downtown devel- walking conditions on local business performance. This study
opment plans utilize pedestrian-friendly urban structures controls for walking volume and walking conditions in one model
(Robertson, 1993). Such urban structures tend to increase people's to isolate the effects of pedestrian volume on retail sales.
willingness to walk to retail stores (Schneider, 2015). A few studies The rest of this paper has four sections. The first section ad-
have analyzed how pedestrian-friendly urban structures in the dresses the study area and data sources used for the econometric
United States alter retail sales. New York City's Department of New tests. The second section provides the motivation behind
York Department of Transportation (2013) confirmed that a project measuring spatial accessibility and centrality and details about
for pedestrian-friendly streets increased retail sales in the relevant variables in the multilevel regression models. The third section
area according to a comparison of retail performance between interprets the model results, focusing on how spatial accessibility
impacted and non-impacted zones. Further, Leinberger and Alfonzo and centrality to pedestrians affect retail sales. The final section
(2012) show that walkable neighborhoods generate higher retail summarizes the results and suggests policy implications.
sales and rent by attracting more pedestrians.
Other studies relevant to retail location have confirmed that 2. Study context and data sources
higher centrality and connectivity along street networks substan-
tially explain the spatial distribution of retail activities (Scoppa & Seoul's main economic sector evolved from secondary to ter-
Peponis, 2015). Specifically, higher betweenness centrality is tiary since the 1970s. The 2011 industry data show that the tertiary
associated with more clustering of retail and service activities sector accounted for 88.9% of Seoul's industry. In the tertiary in-
(Porta et al., 2009). The response of retail location to street dustry, wholesale and retail, accommodation, and food and bev-
configuration varies by retail type. Among retail stores, specialty erages have become dominant industries. In 2011, wholesale and
stores and department stores considerably preferred to have a retail accounted for 32.0%; accommodations and food and
more accessible location (Wang, Chen, Xiu, & Zhang, 2014). Another beverage, 17.7%; transportation, 13.6%; other services, 10.3%; and
112 C.-D. Kang / Habitat International 57 (2016) 110e120

business services, 6.0% of the tertiary sector (Seoul Institute, 2015). Core (TUC) area with the Central Business District (CBD), the New
Thus, retail activities are important to Seoul's industrial structure Urban Core (NUC) area with a sub-CBD (Kangnam Business District,
and local economy. KBD), and the Mixed Core (MC) area with a sub-CBD (Youido
On the other hand, the Seoul Metropolitan Government (SMG) is Business District, YBD) (Jang & Kang, 2015). The section on abbre-
focused on pedestrian-friendly and sustainable cities. The SMG has viations details the information on regional classification. The 2010
implemented multiple policies to expand pedestrian and public retail and service statistics show that the share of employment and
transit-oriented urban settings, such as the replacement of free- firms respectively was 26% and 18% in the NUC, 16% and 15% in the
ways with urban greenways, the development of car-free streets, TUC, and 8% and 5% in the MC (Statistics Korea, 2012).
and the creation of transit malls (Seoul Metropolitan Government, As mentioned previously, we used the retail sales data for five
2014). As Seoul city has enhanced its local economy and quality of types of retail sectors (see Table 1). We have matched the Korean
life through retail development and walkable urban structures, it is retail sectors with the North American Industrial Classification
a suitable case to empirically test a strong relationship between System for a better understanding.
pedestrian volume and retail sales. Fig. 2 compares the concept of the Korean census tract and Small
This study analyzes unique data on retail sales and pedestrian Areas. The Korean census tract represents the smallest statistical
volume to test the effects of pedestrian access to retail stores on the and spatial units for aggregating socioeconomic data. Statistics
sales. SKT Geovision, a division of SK Telecom that is a mobile Korea identifies these units using homogeneous features such as
phone service company, provided the data for three regions in demographic attributes, economic status, and living conditions.
Seoul (see Fig. 1). The amount for sales per Small Area was deter- Seoul had 16,671 units with about 500 inhabitants, on average, in
mined by credit card payments, Value Added Network (VAN), and 2010 (Kang, 2015; Statistics Korea, 2012). To aggregate retail sales
Points of Sales (POS) in April, June, September, and December 2013. data, SKT Geovision subdivides the Korean census tracts into Small
The data, however, does not offer information on the number of Areas, each with a daytime population of at least 1,000 individuals.
retail stores. The retail sales data were categorized according to the To control for other factors that change retail sales, we used
type of retail sectors, such as Education, Food, Medical Services, geographical information such as location and transportation, land
Retail, and Services. SKT Geovision also provided the pedestrian usage attributes of census tracts, socioeconomic attributes, retail
volume data per pCell unit developed by the company. A pCell is a type, and time of sales. The SMG provides geographical information
50-by-50 m spatial unit for aggregating pedestrian volume data on road and street networks, CBD and sub-CBD locations, subway
using mobile signals. We assume that accessibility and centrality to stations, bus stops, major retail centers, parks, schools, and the total
walkers measured at the pCell points affect the retail sales at the building area of land used per Korean census tract. Statistics Korea,
nearest centroids of the Small Area because these two factors as the Census Bureau in the United States, offers population and
indicate neighborhood conditions in the pCell units. employment information for each census tract.
As Fig. 1 illustrates, the three regions are the Traditional Urban

Fig. 1. Location of the study areas.


C.-D. Kang / Habitat International 57 (2016) 110e120 113

Table 1
Retail sector types and descriptions.

Type Description

Education Child day care service; Exam preparation and tutoring services
Food Full service restaurants; limited service restaurants; cafeterias, grill buffets, and buffets; snack and nonalcoholic
beverage bars; beer, wine, and liquor stores
Medical Services General medical and surgical hospitals; pharmacies and drug stores
Retail Furniture stores; electronic stores; food supplement stores; transportation; book stores; hobby, toy, and game
stores; office supplies and stationery stores; other miscellaneous stores; clothing accessories stores; clothing stores
Services Beauty salons; accommodation; recreation services; all other personal services

Note: Obtained from SKT Geovision (2013).

Fig. 2. Comparison of the Korean census block and small area unit concepts.
Sources: Statistics Korea (2012), SKT Geovision (2013)

3. Methodology 3.2. Description of variables

3.1. Motivation To identify the different effects of spatial accessibility and cen-
trality to walking on retail sales, we measure Reach, Gravity Index,
Distinctly from previous studies, we note that pedestrian vol- Betweenness, Closeness, and Straightness (see Table 2). While
ume and street networks matter in spatial retail sale variation. Reach indicates the total pedestrian volume within a given network
Intuitively, pedestrian retail access and relative spatial concentra- distance from retail spots, Gravity Index represents Reach com-
tion generate local variation in retail sales. Thus, the concurrent bined with distance friction based on Hansen's accessibility
measure of street configuration and walking volume in a single concept. With respect to centrality indices, Betweenness is defined
index provides more reliable and accurate information on the as the passing of a specific location in total passing pedestrian
relationship between spatial pedestrian patterns and retail eco- volume over the neighborhoods, Closeness indicates the total
nomic performance. A few related studies show that a comfortable pedestrian volume multiplied by the network distance from retail
street network configuration with retail activities is a favorable spots, representing the centrality of the retail spots, and Straight-
urban setting for walking (Ozbil, Peponis, & Stone, 2011; Peponis, ness measures the extent to which paths from retail spots to other
1989). However, our knowledge of the integrated pedestrian vol- pedestrian points are straight lines. Previous studies have generally
ume and street network configuration effects on retail sales is used these indices, which justifies our use of the measures. Gravity
limited. This study notes that the Urban Network Analysis (UNA) Index is widely used to measure spatial variation of accessibility
measure of spatial accessibility and network centrality is an effec- (Hansen, 1959; Sevtsuk, 2014). Betweenness, Straightness, and
tive tool in considering street network structure and walking vol- Closeness are popular indices in studies assessing the relative
ume concurrently. Related studies have used the concept of importance of urban networks and flows (Kuby, Tierney, Roberts, &
accessibility and centrality as the key determinants of street net- Upchurch, 2005; Xiao, Webster, & Orford, 2014). We expand these
works to explain population density, residential property price and concepts by combining pedestrian volumes and street networks,
rents, and commuting behavior (Chiaradia, Hillier, Schwander, & and measure the sophisticated connection between them.
Barnes, 2013). We mobilize three components for the empirical study to
114 C.-D. Kang / Habitat International 57 (2016) 110e120

Table 2
Accessibility and centrality to pedestrians and calculation methods.

Indices Calculation methods


P
Reach Reachr ½i ¼ W½j
j2Gfig;d½i;jr
Gravity Index r P W½j
Gravity ½i ¼ εb$d½i;j
j2Gfig;d½i;jr
Betweenness P njk ½i
Betweennessr ½i ¼ njk $W½j
j2Gfig;d½i;jr
Straightness P d½i;j
Straightnessr ½i ¼ d½i;j
$W½j
j2Gfig;d½i;jr
Closeness Closenessr ½i ¼ P 1
ðd½i;j$W½jÞ
j2Gfig;d½i;jr

Note:
i: The pCell points nearest to the centroids of Small Areas (retail sites).
j: The pCell points (pedestrian spots).
G: Network.
r: Network radius (500 m).
d[i, j]: Shortest network distance between origin i and destination j (meter).
d[i, j]: Euclidian distance between origin i and destination j (meter).
njk[i]:Number of paths passing through node i with j and k in the network radius r from i.
njk: Number of paths between nodes j and k.
Beta (b): 0.00217.
W[j]: Number of walkers in j (persons).
Source: Modified from Sevtsuk and Mekonnen (2012).

examine how spatial accessibility to walking affects retail sales: commutes, similar to the ones considered in this study. A few
spatial data, the Urban Network Analysis (UNA) toolbox installable studies confirmed that the Gravity Index substantially explains the
for the ArcGIS program, and a multilevel regression model in the variations of land-usage patterns, retail store locations, and local
Stata program. The dependent variable is the 2013 data for total employment patterns (Hansen, 1959; Huff, 1963; Waddell &
retail sales per Small Area. The independent variables that we Ulfarsson, 2003).
adopted with a reference to previous studies are (1) five accessi- Network centrality incorporates Betweenness, Closeness, and
bility and centrality indices related to pedestrians, (2) location and Straightness. Betweenness represents the number of passings at a
transportation, (3) land-use attributes in Seoul's census tract units, specific node i relative to total available passings between two pairs
(4) socioeconomic features in the census tract units, (5) retail types of other origins k and destinations j, weighted by the walking
(dummy variables with reference to Education), and (6) time of volume of the destinations. Empirical studies have confirmed that
sales (dummy variables with reference to April 2013). Betweenness significantly alters the spatial patterns of retail and
service stores (Porta, Crucitti, & Latora, 2005; Sevtsuk, 2014).
3.2.1. Pedestrian accessibility and centrality Closeness, a popular centrality index, measures how close each
This study applied UNA to measure Reach, Gravity Index, origin is to the adjacent destination within a given threshold path
Betweenness, Closeness, and Straightness from the nearest pCell to distance. This measure can identify the pedestrian volumes
each centroid of the Small Areas (retail sites) to each pedestrian weighted by the shortest path distances between origins and des-
spot within a given radius (500 m). Table 2 shows the calculations tinations close to the origin location within a given radius. In the
of accessibility and centrality. The UNA was originally developed by calculation, a lower Closeness value means more total pedestrian
the MIT City Form Lab (Sevtsuk & Mekonnen, 2012). In our analysis, volume weighted by the shortest network distance within a given
the origin is a nearest pCell to the centroids of the Small Areas, and threshold. Thus, lower Closeness coefficients indicate highly posi-
the destinations are the pedestrian-counted spots. We note that tive effects on retail sales. The final network centrality index,
this approach incorporates a third element, walking volume, with Straightness, measures the similarity between the shortest
the nodes and edges of typical street networks. While most pre- network distance from the origin i to the destination j within a
vious analyses of street networks ignore spatial variation of walking given radius and the straight-line distance (Porta et al., 2005). In
activities along the network, the UNA in this study measures the reality, higher Straightness indicates the existence of a direct route
spatial accessibility and centrality incorporating the two elements, between the surrounding pedestrian spots and a higher visibility of
namely of street network configuration from origins and destina- the origin, which influence retail sales (Lynch, 1960).
tions, and pedestrian volumes at the destinations (Sevtsuk &
Mekonnen, 2012). Thus, this tool effectively generates more accu- 3.2.2. Location and transportation
rate information and realistic results for urban studies, planning Locational advantage and nearness to transportation change the
and policy, and design. spatial patterns of retail sales. Many empirical models verify that
Spatial accessibility is measured by the Reach and Gravity Index. access to urban centers and sub-centers, transportation networks,
While Reach indicates the sum of pedestrians within a 500-m public transit, retail centers, education facilities, and parks as
radius along the shortest distance between origin i and destina- common walking environments influence walkability (Cerin,
tion j, the Gravity Index, first used by Hansen (1959), represents the Macfarlane, Ko, & Chan, 2007; Forsyth, Hearst, Oakes, & Schmitz,
Reach concept combined with distance decay (beta value). This 2008; Tiwari, Cervero, & Schipper, 2011; Vojnovic, Jackson-
study sets the beta value to 0.00217 for meter distance, as sug- Elmoore, Holtrop, & Bruch, 2006; Wey & Chiu, 2013). Several
gested by Handy and Niemeier (1997). Two reasons permit the use studies adopt a street-focused approach, concentrating on topo-
of this value. First, there is no empirically measured beta value that logical and physical attributes of street configurations, street den-
fits the local context. Second, the value was calculated in the sity, connectivity, and spatial patterns of reachable destinations
context of convenience shopping travel, which involves short (Agrawal & Schimek, 2007; Baran, Rodriguez, & Khattak, 2008;
C.-D. Kang / Habitat International 57 (2016) 110e120 115

Boarnet & Crane, 2001; Crane & Crepeau, 1998; Ewing & Cervero, September, and December 2013, we contain the dummy variables
2001; Lee & Moudon, 2006; Song & Knaap, 2004). To control for for June, September, and December 2013 in the full model with
location and transportation attributes, we measure the distance to reference to April 2013.
the CBD and five sub-CBDs, subway stations and bus stops, streets
and roads, main retail areas, schools, and parks. Further, we control
3.3. Multilevel regression models
for the density of subway stations, bus stops, street and road con-
nectivity, and park areas per Korean Census Block unit.
Since we analyze different units of data, namely, Small Area
(Level 1) and Korean census tract (Level 2), we apply multilevel
3.2.3. Census tract land usage attributes regression models. In the model framework, while the Small Area
Neighborhood land use is also an important part of the urban data include retail sales, spatial accessibility and centrality to pe-
setting that affects the relationship between the spatial variation of destrians, distance to main transport systems and urban facilities,
walking and local retail sales. A few studies confirmed that higher retail types, and time of sales, the geographical data in the Korean
access to land use and higher land use density tend to be positively census tracts contain net density of main transportation facilities
associated with a higher pedestrian volume (Frank & Pivo, 1994; and connectivity, park density, land use attributes, and socioeco-
Zhao, 2014). Thus, this study focuses on mixed land use, balanced nomic attributes. Because the units of the data are different, we use
between residential and nonresidential use, overall land develop- multilevel regression models to help correct the under or over-
ment density, and four types of land use density: residential, estimation of coefficients by applying ordinary least squares
commercial, office, and industrial space. The Entropy index mea- regression (Rabe-Hesketh & Skrondal, 2008). Our multilevel
sures mixed land use in Korean census tract units. It is applied to regression uses the following equation:
measure the mix of five types of land-use: residential, commercial,
office, industrial, and others, where a value close to 1 indicates Pij ¼ g00 þ b1 Aijk þ b2 Sijk þ b3 Cijk þ b4 Lijk þ b5 Eijk þ b6 Tijk þ m0j
mixed land use based on formula (1):
þ εij
Pn
i¼1 Pi lnðPi Þ (3)
Mixi ¼ (1)
lnðnÞ
where Pij is the retail sales in Small Area i (Level 1) in census tract j
where n is the number of land-use types (here, n ¼ 5), and Pi is the (Level 2), bk refers to the model coefficients of variables (k ¼ 1, 2, 3,
proportion of each land use i. …, m), r00 denotes the model constants, Aijk is a vector of pedestrian
As another land use index, we calculate the balance indexes of accessibility and centrality in Small Area i and census tract j, Sijk is a
residential and nonresidential (commercial, office, industrial, and vector of location and transportation in Small Area i and census
other) land use from the 2009 Seoul Building Register data. The tract j, Cijk is a vector of attributes of land use and transportation in
balance index based on formula (2) ranges from 0 to 1, where a Small Area i and census tract j, Lijk is a vector of socioeconomic
higher value indicates a higher balance between pairs of land use attributes in Small Area i and census tract j, Eijk is a vector of retail
types (Cervero & Duncan, 2003; Kang, 2015). types in Small Area i, Tijk is a vector of sales time in Small Area i,
and u0j and eij are the residual error terms of census tract units and
Res  Nonresi Small Areas, respectively.
Balancei ¼ 1  j j (2)
Res þ Nonresi We take a log-log functional form and convert the dependent
and independent variables into natural logarithms, except for the
To measure land use development density, we measure the net
dummy variables for retail types and sales time. We choose the log-
area with the Korean census tracts. The net area represents the total
log form because, first, there is no consensus on the selection of
biotope for residential, commercial, office, industrial, and infra-
specific functional forms (Duncan, 2011). Second, we apply the
structural space in each census tract from the 2010 Seoul Biotope
untransformed, semi-log, or log-log models, and choose the log-log
data (Kang, 2015). While the overall development density is the
form because the models generate better results from theoretical
total building area divided by the net area, the land use density is
and empirical perspectives. Finally, the log-log form helps interpret
measured as the area of each building in the total residential,
the coefficients as mean attribute elasticity regardless of variable
commercial, office, and industrial space divided by the respective
attributes (Shyr, Andersson, Wang, Huang, & Liu, 2013).
net area.
Before our empirical analysis, we use an intra-class correlation
(ICC) test to check whether a multilevel regression is appropriate.
3.2.4. Socioeconomic attributes An ICC value exceeding 0.05 justifies the use of multilevel regres-
Dense population and employment environments are favorable sion. Otherwise, we should use typical regression models.
urban settings for the provision of various services and land use Furthermore, we use the variance inflation factor (VIF) test and
within walking distance (Chen, Jia, & Lau, 2008; Forsyth et al., 2008; correlation matrix to check for correlation between the explanatory
Loo & Chow, 2006). Thus, we control for the two variables variables.
measured by the density of residents and workers, respectively. Table 3 presents the variables and descriptive statistics. The
sales range from USD 0.05 to USD 204 million (USD 1 ¼ 1,161 KRW)
3.2.5. Retail types per Small Area. The table reports the values of five accessibility and
Retail sales vary by sector type. To control for the effects of centrality measures using the UNA tool. Location and trans-
sector types, we construct a dummy variable for each retail type portation attributes contain the density of each transport facilities,
with reference to Education. Thus, we include the dummy variables connectivity of roads and streets, and park within the Korean
for the Food, Medical Services, Retail, and Services sectors in the full census tracts and the distance from urban centers, transportation
model. facilities and neighborhood attributes to the Small Areas. The
census tract attributes of land use include land use mix, the balance
3.2.6. Time of sales between residential and nonresidential use, and the net density of
Because of seasonal consumption, the timing of sales affects the total development and individual land use. As reported under so-
volume of retail sales. As the sales data were recorded in April, June, cioeconomic attributes, the mean of net employment density is
116 C.-D. Kang / Habitat International 57 (2016) 110e120

Table 3
Descriptive statistics.

Variable description Variable code Mean Min. Max.

Retail sales
Retail sales (Korean Won) logsales 117,000,000 61 237,000,000,000
Accessibility and centrality to pedestrians
Reach logreach 7,167.54 0.00 125,699.50
Gravity Index loggra 4,665.85 0.00 96,309.28
Betweenness logbet 52,032.98 0.00 3,679,777.00
Closeness logclo 0.0001 0.00 1.55
Straightness logstra 7,014.08 0.00 125,583.50
Location and transportation attributes
Distance to CBD logcbd_dis 8,485.04 115.70 17,961.61
Distance to sub-CBD logscbd_dis 3,663.82 96.32 11,505.59
Distance to subway stations logsub_dis 479.57 30.06 5,701.90
Distance to bus stops logbus_dis 113.53 1.70 1,016.90
Distance to roads logro_dis 85.85 0.03 1,488.36
Distance to streets logst_dis 25.84 0.00 552.68
Distance to main retail centers logret_dis 629.21 1.26 4,625.01
Distance to schools logsch_dis 342.79 2.08 3,073.55
Distance to parks logpark_dis 239.06 0.44 1,056.51
Net density of subway stations, number of stations per net area logsub_den 0.02 0.00 1.64
Net density of bus stops, number of bus stops per net area logbus_den 0.45 0.00 34.14
Net density of street connectivity, number of connectivity per net area logst_con_~n 13.90 0.00 161.19
Net density of road connectivity, number of connectivity per net area logro_con_~n 1.03 0.00 30.72
Total park area per net area logpark_ar~n 86,456.22 0.00 4,090,000,000.00
Census tract attributes of land use
Entropy index of residential, commercial, office, industrial, and other land use newmix5 0.51 0.00 0.96
Balance index for residential and non-residential use resi_nonresi 0.43 0.00 1.00
Net density of building development, total building area per net area logdev_den 25,100.09 65.81 26,300,000.00
Net density of residential development, total residential area per net area logresi_den 9,017.74 0.02 392,129.90
Net density of commercial development, total commercial area per net area logcom_den 7,794.76 0.03 26,300,000.00
Net density of office development, total office area per net area logoff_den 7,220.57 0.02 113,544.80
Net density of industrial development, total industrial area per net area logind_den 171.67 0.02 25,921.95
Socioeconomic attributes
Net population density logpop_den 242.21 0.00 3,134.90
Net employment density logemp_den 447.74 0.00 165,985.80
Retail types
Education (Reference group, yes ¼ 1, no ¼ 0) type_dum1 0.04 0.00 1.00
Food (yes ¼ 1, no ¼ 0) type_dum2 0.45 0.00 1.00
Medical Services (yes ¼ 1, no ¼ 0) type_dum3 0.09 0.00 1.00
Retail (yes ¼ 1, no ¼ 0) type_dum4 0.30 0.00 1.00
Service (yes ¼ 1, no ¼ 0) type_dum5 0.13 0.00 1.00
Time of sales
April 2013 (Reference group, yes ¼ 1, no ¼ 0) month_dum1 0.25 0.00 1.00
June 2013 (yes ¼ 1, no ¼ 0) month_dum2 0.25 0.00 1.00
September 2013 (yes ¼ 1, no ¼ 0) month_dum3 0.25 0.00 1.00
December 2013 (yes ¼ 1, no ¼ 0) month_dum4 0.25 0.00 1.00

higher than the net population density, indicating a higher con- significance level. The VIF ranges from 1.29 to 6.37, indicating no
centration of workers. The retail type and time of sales serve as multicollinearity. We additionally analyze and compare the effects
dummy variables with the reference groups. by retail type. Owing to the higher correlation among the five
accessibility and centrality indices in the correlation matrix of all
4. Results and discussion variables used, we identify the effects of the indices in the indi-
vidual models as shown in Table 4.
This study validated and calibrated all models from theoretical
and empirical perspectives as well as through methodological tests. 4.1. Effects of spatial accessibility and centrality to pedestrians
We checked the sign and statistical significance of the coefficients
by referring to existing studies. Further, the test results of the ICC Fig. 3 compares the marginal effects of pedestrian accessibility
for the multilevel regression models, VIFs, and a simple correlation and centrality on retail sales by type. The marginal effects are
matrix justified the selection of the variables. In Table 4, the full derived from the coefficients of the full models and each individual
model analysis includes 119,702 retail sales per Small Area (Level 1) model by retail type. The figure compares the five indices in all
and 2,619 Korean census tracts (Level 2). The R-square values are models and shows that Reach and Gravity Index have almost
0.16 (overall), 0.07 (within), and 0.36 (between). The R-square similar effects whereas Straightness has remarkably greater effects
values are relatively low due to the following reasons. First, the than Closeness and Betweenness.
excluded nonspatial factors such as the service level, price, and Thus, the higher accessibility of pedestrians, indicated by the
other components affect the retail sales performance. Second, we Reach and Gravity Index, and the higher centrality, indicating vis-
use the retail sales aggregated by Small Area units. Thus, the models ibility to walkers, as measured by Straightness, considerably tend to
exclude the factors concerning the sales of individual retail stores. increase the sales volume of all retail types. The effects of Closeness
Each model's ICC (Rho) is 0.2, which is more than 0.05, the refer- and Betweenness on retail economic performance are relatively
ence value, which justifies the use of multilevel regression models. weaker, contrary to propositions of previous studies. Since we
This study limits the variable coefficients within the 5% statistical consider both street configuration and pedestrian volume for each
C.-D. Kang / Habitat International 57 (2016) 110e120 117

Table 4
Multilevel regression models for all retail types.

Variables Model 1 Model 2 Model 3 Model 4 Model 5 VIF

Coefficients Coefficients Coefficients Coefficients Coefficients

Accessibility and centrality to pedestrians


logreach 0.0202*** 1.33
loggra 0.0210*** 1.34
logbet 0.00595*** 1.36
logclo 0.0126*** 1.27
logstra 0.0201*** 1.34
Location and transportation
logcbd_dis 0.0193 0.0192 0.0187 0.0191 0.0189 1.91
logscbd_dis 0.0273 0.0271 0.0273 0.029 0.0272 1.21
logsub_dis 0.0837*** 0.0831*** 0.0870*** 0.0861*** 0.0835*** 1.36
logbus_dis 0.0479*** 0.0480*** 0.0506*** 0.0483*** 0.0478*** 1.36
logro_dis 0.0625*** 0.0627*** 0.0645*** 0.0628*** 0.0624*** 1.46
logst_dis 0.00111 0.000881 0.00813 0.0000241 0.000997 1.41
logret_dis 0.198*** 0.198*** 0.201*** 0.198*** 0.198*** 1.63
logsch_dis 0.0976*** 0.0980*** 0.0963*** 0.0968*** 0.0975*** 1.19
logpark_dis 0.0368** 0.0369** 0.0351* 0.0366** 0.0368** 1.26
logsub_den 0.0732 0.0733 0.0747 0.0728 0.0732 1.53
logbus_den 0.129*** 0.129*** 0.126*** 0.129*** 0.128*** 1.45
logst_con_~n 0.214*** 0.214*** 0.223*** 0.215*** 0.214*** 2.36
logro_con_~n 0.0281 0.0283 0.0346 0.0281 0.0283 1.43
logpark_ar~n 0.00437 0.00439 0.00417 0.00422 0.00442 1.39
Census tract attributes of land use
newmix5 0.651*** 0.650*** 0.630** 0.655*** 0.650*** 5.02
resi_noresi 0.188 0.189 0.198 0.186 0.188 2.82
logdev_den 0.247*** 0.247*** 0.255*** 0.249*** 0.247*** 2.48
logresi_den 0.0332* 0.0332* 0.0330* 0.0328* 0.0332* 3.13
logcom_den 0.0198* 0.0198* 0.0210* 0.0197* 0.0198* 2.89
logoff_den 0.00285 0.00283 0.00254 0.00266 0.00285 3.78
logind_den 0.00323 0.00333 0.00447 0.0028 0.00324 1.54
Socioeconomic attributes
logpop_den 0.195*** 0.195*** 0.194*** 0.195*** 0.195*** 3.97
logemp_den 0.0383* 0.0383* 0.0404** 0.0384* 0.0382* 3.62
Retail types
type_dum2 0.0540* 0.0540* 0.0552* 0.0541* 0.0540* 7.3
type_dum3 0.505*** 0.505*** 0.505*** 0.505*** 0.505*** 3.03
type_dum4 0.533*** 0.533*** 0.534*** 0.533*** 0.533*** 6.36
type_dum5 1.067*** 1.067*** 1.069*** 1.067*** 1.067*** 3.91
Time of sales
month_dum2 0.00587 0.00585 0.00661 0.00619 0.00588 1.51
month_dum3 0.0729*** 0.0730*** 0.0706*** 0.0719*** 0.0729*** 1.5
month_dum4 0.0326* 0.0325* 0.0350** 0.0339** 0.0326* 1.51
Constant 16.21*** 16.20*** 16.30*** 16.24*** 16.21***
Rho 0.2 0.2 0.2 0.2 0.2
Number of cases 119,702 119,702 119,702 119,702 119,702
Number of groups 2,619 2,619 2,619 2,619 2,619
R-square
Within 0.07 0.07 0.07 0.07 0.07
Between 0.36 0.36 0.35 0.36 0.36
Overall 0.16 0.16 0.16 0.16 0.16

Note: *p < 0.05, **p < 0.01, ***p < 0.001.

Fig. 3. Marginal effects of accessibility and centrality to pedestrians on retail sales by retail type.
118 C.-D. Kang / Habitat International 57 (2016) 110e120

index within the relatively short radius of 500 m, our results differ effect on retail sales. Retail stores closer to subway stations, bus
from those of related studies. stops, roads, and main retail zones have more sales, contrary to
A comparison between the five indices measuring pedestrian those closer to schools and parks. This clearly shows that retail
effects implies multiple and actual connections between walking stores near main transportation nodes and networks enjoy a su-
volume and retail sales. As the Reach and Gravity Index effects perior economic performance by offering greater access for pe-
indicate, a larger volume of pedestrian traffic within a 500-m radius destrians. Higher mix of diverse land use, development density, and
tends to increase retail sales in the neighborhoods. Because of weak commercial density consistently generate higher retail sales. Thus,
spatial impedance in the Gravity Index, we did not observe any we confirm higher mixed land use, dense development, and retail
remarkable difference between the effects of Reach and Gravity concentration are favorable urban settings for retail economic
Index effects on retail sales. These results imply higher retail sales performance. While employment density is positively associated
in the neighborhood of dense networks and higher walking vol- with sales, population density has the opposite effect. Since most
umes. Furthermore, as the Straightness effects suggest, retail stores retail stores share their location with offices in Seoul, higher
with higher visibility and direct routes that facilitate larger walking employment density is considerably associated with higher retail
volumes enjoy a superior economic performance. Unlike previous sales. As previously mentioned, the models contain dummy vari-
studies that focused on Betweenness and Closeness without ables for the Food, Medical Services, Retail, and Services sectors
incorporating pedestrian volumes, this study finds that the effects with Education sector as the reference. Medical Services had
of Betweenness and Closeness on retail sales are weaker than those highest sales among the retail sectors. Compared with April 2013,
of Reach, Gravity Index, and Straightness. Thus, dense streets, the December 2013 sales were higher but the September 2013 sales
higher pedestrian volumes, and direct routes to pedestrians, which were lower. Generally, Koreans tend to spend more during holiday
are factors that indicate higher retail store visibility, matter in seasons such as Christmas and New Year day owing to their larger
spatial retail sales variation. volumes of seasonal consumption.
Interestingly, the indices produced heterogeneous effects on
sales by retail type. The greatest positive effects of accessibility and 5. Conclusion and policy implications
centrality to pedestrians are on Medical Services sector sales, fol-
lowed by Education sector sales. Except for Betweenness effects on This empirical study isolated the effects of pedestrian accessi-
the Retail sector, all retail types (full models), and the Food, Retail, bility and centrality on retail sales, controlling for other variables.
and Services sectors have almost similar effects of spatial accessi- We highlight the key findings of this study, which are different
bility and centrality. Usually, retail stores near highly dense street from those of previous studies, in terms of four aspects. First, the
networks with higher pedestrian volumes have higher sales reve- UNA tool presented five accessibility and centrality indices of
nues. In contrast, Betweenness has no statistically significant effect pedestrian volume and street configuration concurrently. Distinctly
on the Retail sector selling various goods. In Seoul, large and small from previous studies, our indices introduce perspectives on the
stores serve wide areas, including roads and subway stations near spatial connection between walking volume, street network layout,
residential areas. Thus, the positive and negative effects of and retail sales. Second, we compared the various effects of
Betweenness vary across store locations. accessibility and centrality indices to walking volume on retail sales
From the heterogeneous attributes of retail stores, we infer that under a single framework. Higher accessibility to pedestrians,
spatial accessibility and centrality to pedestrians generate different indicated by the Reach and Gravity Index, and higher visibility to
effects by retail type. Table 2 indicates that the Medical Services and walkers, indicated by Straightness, tend to increase sales perfor-
Education sectors differ from the other sectors in terms of service mance of all retail types. Closeness and Betweenness showed
and customers. While Medical Services offer routing and urgent weaker effects on retail economic performance, contrary to previ-
medical care and medicines, Education supports tutoring and ous studies. Third, we attempted to identify how pedestrian volume
preparing students from elementary to high schools and even along street networks affects retail sales performance, controlling
universities. Usually, hospitals and pharmacies form spatial clusters for location and transportation attributes, land use features, so-
because patients with prescriptions tend to buy medicines near cioeconomic features, retail type, and time of sales. In particular,
hospitals. A Korean study on hospital locations confirmed that this study confirmed that higher walking activities along more
higher daytime accessibility is a key determinant of a hospital's accessible and central streets tend to increase retail sales. Finally,
location (Lee, 2005). Further, private educational institutions also the indices generated heterogeneous effects on revenue by retail
co-locate within limited areas owing to the frequent mobility of type. Accessibility and centrality to pedestrians generated the
students among private educational institutes. Thus, these sectors greatest positive effects on Medical Services sector sales followed
tend to locate near highly accessible and large-scale residential by Education sector. Except for Betweenness effects on the Retail
areas to attract potential patients and students (Han & Lee, 2012). sector, all the retail types (full models) and the Food, Retail, and
In addition, the Medical Services and Education sectors are highly Services sectors’ effects were almost similar for the spatial acces-
sensitive to pedestrian accessibility and centrality because their sibility and centrality indices. Typically, retail stores near dense
clustered locations along well-connected main roads and streets street networks and pedestrian volumes earned higher sales rev-
serve relatively wider zones of potential customers. In contrast, the enue. The strong preference for walkable urban settings and ten-
Food, Retail, and Service sectors serve a larger volume of general dency to consume more goods and services at the retail stores along
customers who buy various goods and services. These three sectors walkable streets of high income groups may explain this pattern.
are located widely along street networks and mainly near roads and However, Betweenness shows no statistically significant effects on
key transportation nodes such as subway stations and bus stops. the Retail sector selling various goods.
These spatial patterns imply that the sectors are usually exposed to Our core findings offer a few insightful policy implications for
dense networks and higher pedestrian volumes. urban planners and designers seeking to create pedestrian-friendly
urban structures and ensure dynamic retail development. First, the
4.2. Effects of other variables econometric models verified that the spatial association between
pedestrian volume and street configuration affects retail sales per-
Other controlled variables partly determine retail sales. The formance. Thus, an urban fabric that efficiently combines walking
distance to the CBD and sub-CBDs has no statistically significant volume along street networks and local retail policies can enhance
C.-D. Kang / Habitat International 57 (2016) 110e120 119

the health of local retail activities. Second, for developing effective performance. Nevertheless, further studies on walking and retail
designs, urban designers should consider the features of the retail for a longer period and in other cities would help find a more so-
type, the local context of street networks, and retail performance. As phisticated relationship between walking behavior and retail sales.
our study results indicate, these complex features combining This study provides an applicable framework with which to eval-
pedestrian patterns and street connectivity substantially affect local uate and predict urban policy and design related to pedestrians and
economic vitality. Third, guidance and advice based on information retail development for other cities. Increasingly, city leaders are
on retail fabric, neighborhood socioeconomics, and policies for turning their attention to developing pedestrian-friendly cities and
transportation networks and land use would support retailers in ensuring economic prosperity of local businesses. Thus, the meth-
their decision-making process on retail location and type. Further, odological approach and empirical results of this study can deepen
sophisticated methods and analysis on the link between walking and their understanding on walking behavior and retail business per-
retail sales provide effective knowledge to evaluate how urban policy formance, and support them in creating relevant and effective ur-
and design change local retail business, controlling for other relevant ban policies and designs for sustainable and livable cities.
variables. Fourth, attractive place-making and walkable neighbor- The limitations of the models suggest new topics for future
hood strategies promote economic prosperity of local retail. Well- research. First, we focused on three among 25 wards in Seoul owing
known places with better amenities and events attract a signifi- to our limited access to relevant data. Thus, expanding research
cantly larger number of residents, firms, and tourists, enhancing over Seoul and other cities should yield more general and appli-
neighborhood retail performance. In addition, a well-organized cable conclusions. Second, future studies should investigate aspa-
street network configuration that appeals to pedestrians would be tial factors, such as quality of service and relative price, to partly
a highly effective solution to draw various retail stores and increase affect retail sales. Because we examine the effects of spatial attri-
the potential demand of residents and visitors. Finally, we need more butes on retail sales, further study may compare the effects of
expanded perspectives on urban form indicating the physical pattern spatial and aspatial factors on the variation of economic perfor-
of land use and transportation infrastructure and individuals’ mance of retails. Finally, we may apply the research framework to
behavior. Specifically, the components essential to create pedestrian- examine the effects of multi-modal transportation networks on
friendly and vibrant retail neighborhoods are a holistic plan and urban economic performance. For instance, the combination of
design allowing close connection between walking and public public transit and walking, driving and walking, or bicycling and
transit, comfortable and attractive urban street design, and transport walking may significantly explain and predict local retail sales.

Abbreviations

Term Description Administrative districts

Traditional Urban Core A concentration of core government functions Jongro-gu, Joong-gu, Yongsan-gu
(TUC) Various traditional and cultural buildings
Constantly declining populations and employment
Old and deteriorating residential areas
Mixed Core (MC) The National Assembly Building in Youido Kangseo-gu, Guro-gu,
Except for Youido and nearby areas, most districts are mixed, and the development of residential, Yangcheon-gu, Youngdungpo-gu,
commercial, and industrial facilities is unplanned Keumchun-gu,
Lack of transit services and amenities for residents and workers Kwanak-gu, Dongjak-gu
New Urban Core (NUC) Areas planned by the central government Seocho-gu, Songpa-gu Kangnam-gu,
A new business district for global, information technology (IT), and finance firms Kangdong-gu
A residential concentration of high-end buildings having high-income residents
Central Business Area for central government offices, conglomerate headquarters, and large- and small-scale retail Jongro-gu, Joong-gu
District (CBD)
Youido Business Area for financial offices, security trading, broadcasting activities, media companies Youido-dong, Youngdungpo-gu
District (YBD)
Kangnam Business Large-scale areas for office, retail, and service firms Kangnam-gu
District (KBD)

Sources: Jang and Kang (2015), Seoul Metropolitan Government (2014).

and land use reform to improve walking mode choice based on Acknowledgement
human behavior.
In conclusion, we confirm the positive effects of access to This research is based on the results of “The Seoul Institute
pedestrian volumes along street networks on retail sales revenue. If Research Competition 2015” and the data provided by The Seoul
the link between walking and retail economic performance could Institute.
be tested in a rigorous and compelling manner and applied
generally, the results could help create more effective urban de-
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