Testing for Market Preemption using Sequential Location Data: Note

This note criticizes the methodology used by West (1981) to test the market preemption prediction of the Eaton-Lipsey model. There are problems with both the specification of the null hypothesis and the procedures used to test it. Even if West's data are used to examine his null hypothesis in more appropriate ways, the results do not support his conclusion that the supermarket location decisions he studied were dependent on which firms owned neighboring stores.