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Market for Formal Childcare in the Cairns Region: Demand, Supply and Prescriptions for New Childcare Facility Locations

International Journal of Applied Marketing (ISSN: 1742-2612) Volume 2 Issue 1

Adee Athiyaman
Illinois Institute for Rural Affairs
Western Illinois University

Abstract

This study assesses the market for “formal” childcare industry in the Cairns region of Queensland, Australia. Formal childcare is defined as regulated care that takes place away from the child’s home. As at February 2006, there were 39 long day cares, 25 school age cares, three family day cares, and nine kindergartens in the region that had a combined total of more than 2829 licensed places. The market potential for formal childcare is 5520 places. There is a gap of at least 2691 places in the region. It is shown that a geographical region within the Trinity statistical local area in Cairns would be an ideal location for a new childcare facility.

The paper reports a study that applies quantitative tools that can assist marketing planners to assess demand for goods and services and to decide on geographical locations for new retail facilities. Briefly, a ‘biased’ regression approach is highlighted to estimate structural relations between criterion (product demand) and its predictors. Then, a differential equation model is used to forecast medium-term (less than three years) demand. Finally, a nonparametric density estimation approach is used to choose a location that would maximize the market share of a new facility.

The Cairns region of Queensland is a typical location, and one of the fastest growing in Australia. This was a suitable testing ground to implement a set of models for assessing demand, and the study was motivated partly by requests for assessment of demand from the North Queensland childcare industry.

Keywords : Determinants of childcare, Equity estimator, Location Choice, Density estimation, Forecasting.

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