Location theory deals with what is where. ‘What’ refers to any possible type of economic activity involving stores, dwellings, plants, offices, or public facilities. ‘Where’ refers to areas such as regions, cities, political jurisdictions, or custom unions. The objective of location theory is to explain why particular economic activities choose to establish themselves in particular places. Here we focus on spatial competition theory between firms, where locations are subject to attracting and repelling forces. We then extend this framework in order to account for the residential choices made by consumers.