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 <!–html_preserve–>
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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