A Survey of Market Access Level: An Application of Economic Gravity Index

During to the past three decades, Demand-Driven factors, including the market access, demographic factors, and the market potential have placed in a special position. The limitations on market access lead regional underdevelopment, especially in smaller regions. Therefore, evaluating the potential level of market access and comparing it to the current realized situation of the regional market are very important in every province. In order to determine market access potential in each province, in this study, we use the economic gravity index introduced by Tsiapa (2008). In addition, we have done a comparative study with demographic factors such as the population concentration and the migration. It has been studied in all provinces of Iran in 2013. The results show that Tehran, Isfahan, Khorasan Razavi, Khuzestan and Fars provinces have the highest level of market access, due to the geographical location and population. In contrast, Ilam, South-Khorasan, North Khorasan and Kohgiluyeh-Boyerahmad have the lowest level of market access. A higher level of market access lead to economies of scale and externalities and therefore, it has a critical role in improving the regional development level. Despite the role of the factors and product market through the establishment of population and activity and therefore, its role in the gravity index changes, it can be concluded that Demand-Driven policies have the greatest impact on the level of market access.