Bussiness agglomeration study

What is bussiness agglomeration ?

  • Similiar kind of businesses co-locating in a cluster is called agglomeration.
  • Businesses benefit by reducing costs and attaracting more customers.
  • We can study the affect of agglomeration with repect to its star rating statistically

Restaurant clustering in Las Vegas

  • We see below an example of restaurant clustering in Las Vegas and the effect of running a spatial clustering algorithm

- The algorithm identifies clusters as well as isolated restaurants as shown in the map below. The clusters identified by the algorithm are overlaid in the map

Statistical Analysis of two populations

  • Running the cluster analysis on the entire dataset (limited to cities with restaurants more than 200) we gather up the top 3 clusters (which contain highly clustered restaurants) and bottom 25 (which will mainly contain isolated restaurants)
  • We create two pools and run a 2 sample t-test to test the hypothesis that clustered restaurants have significantly different rating than isolated restaurants

Results

  • Results of the t-test show that clustered restaurants have the same mean rating as isolated ones