Agricultural Economics Department


Date of this Version

November 2006


Published in Cornhusker Economics, 11/15/2006. Produced by the Cooperative Extension, Institute of Agriculture and Natural Resources, Department of Agricultural Economics, University of Nebraska–Lincoln.


Understanding your local trade area is important because retail sales taxes are an important source of revenue for local governments; and the geographic concentration of retailing directly affects smaller communities. This analysis provides some base information that allows a better understanding of local trade areas. It should be considered a first step in developing a larger trade area plan and strategies for expanding the retail sales base. Pull factors are the best method to summarize the relative success of an area’s retail sector. Pull factors estimate the relative proportion of retail sales that a county draws from outside its borders, given its population and income. It compares actual sales to potential sales that would have occurred in the community given its population and income. In short, it is a measure of how well a community captures its local market share.