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There are a number of ways to value a geographical domain name such as a city. One factor that certainly matters is the population of the city. All else being equal (and it rarely is) a city of 100,000 people is better than a city of 10,000 people.

I often see people selling geo domains and advertising that there are multiple cities of the same name. A name like Springfield.com, for example, could refer to many U.S. cities. But you should be careful about valuing a domain based on the total population of these cities.

Consider this example. There are 2 Bastrop cities in the U.S. in Wikipedia. These cities have populations of 13,000 (Louisiana) and about 10,000 (Texas). If you plan to develop Bastrop.com into a directory for either city, it would be foolish to value the domains be adding up both populations (23,000). After all, you can only address one of these cities with your web site.

Of course this assumes you plan to develop the domain. From a resale perspective, the fact that there are two cities with this name increases your odds of a sale. However, you can still expect the person buying the domain from you to look at one city or the other, limiting the total addressable population to 13,000.

Source : Domain Name Wire

URL : http://domainnamewire.com/2008/09/10/how-to-value-city-domain-names/