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International Journal of Economics & Management Sciences

ISSN: 2162-6359

Open Access

Site Selection Study for Refinery Using GIS and Logit, Probit Models

Abstract

Saeed Sadrzadeh Moghadam*, Shahram Golestani and Safieh Azimzadeh

One of the most important steps to establish industries is location studies for determining the best location of industries because the long-run result of this decision creates significant effects on the economy, environment and society. Due to the vast oil field, Iran is the fourth oil producer in the world. The shortage of refining capacity and high domestic demand for oil products has made Iran an importer of oil products like gasoline. Running new capacity of petroleum products is very important and in this way the expansion of existing refineries or building new capacity (construction of oil refineries) is the solution ahead. Given the high costs of constructing oil refineries in the country and state-owned oil industry, for building a new refinery it’s too important to choose the mechanism that minimizes the total costs. So determining the most suitable place for building a new refinery is very important. This study combines GIS and econometric likelihood linear models like logit and probit seeks to determine the optimal location for establishing an oil refinery in the geographical area of the country. In this study, some geographical criteria such as slope and elevation of land are used in the GIS section then all areas are studied and the areas that had the initial condition have been screened. Finally, using the logit and probit models, the studied areas were analyzed based on economic criteria and a final ranking has been done.

JEL classification: C52, C61, C88

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Citations: 6244

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