Estimating the allocation of land to business

by Michiel N. Daams

This paper is uniquely focused on mapping business land in satellite imagery, with the aim to introduce a standardized approach to estimating how much land in an observed area is allocated to business. Business land and control categories of land are defined and operationalized in a straightforward setting of pixel-based classification. The resultant map as well as information from a sample-based quantification of the map’s accuracy are used jointly to estimate business land’s total area more precisely. In particular, areas where so-called errors of omission are possibly concentrated are accounted for by post-stratifying the map in an extension of recent advances in remote sensing. In specific, a post-stratum is designed to enclose areas where business activity is co-located. This then enhances the area estimation in a spatially explicit way that is informed by urban and regional economic thought and observation. In demonstrating the methodology, a map for the San Francisco Bay Area metropolitan area is obtained at a producer’s accuracy of 0.89 (F1-score = 0.84) or 0.82 to 0.94 when sub-selecting reference sample pixels by confidence in class assignment. Overall, the methodological approach is able to infer the allocation of land to business (in km² ± 95% C.I.) on a timely and accurate basis. This inter-disciplinary study may offer some fundamental ground for a potentially more refined assessment and understanding of the spatial distribution of production factors as well as the related structure and implications of land use.