2 Land rentThe main concept is land rent or land value, which will decrease as one gets farther away from central markets.Rent is highest in the closest proximity to urban markets. (Bid-Rent Theory)Thus, agricultural products that have intensive land use, have high transportation costs and were in great demand would be located close to urban markets.
3 Bid-Rent Theory Hard concept!! The further you are from the “best location” the more the rent isSo, beach front hotels cost more than hotels 2 blocks from the beachRetail locations close to Hanes Mall are more expensiveDistribution centers close to the airport have higher rent
4 Von Thunen Model: The first location theory - 1826 A concentric model – same center with larger diameter circles
5 Contains six assumptions There is only one market available, self-sufficient with no outside influence.All farmers are market oriented, producing goods for sale. (Not subsistence.)The physical environment is uniform; there are no rivers or mountains.All points at equal distances from the market have equal access to the market.All farmers act to maximize profits.The dietary preferences of the population are those of Germanic Europeans.
6 Contains six assumptions By definition – models are simplified to illustrate a concept. Most models make assume certain factors to be uniform.There is only one market available – which is the city (defined as center of trade)All farmers are market oriented – selling their goods in the one marketThe physical environment is uniform – no rivers or mountains to disrupt trade. Later is a drawing showing the effect of rivers and a 2nd market
7 Contains six assumptions By definition – models are simplified to illustrate a concept. Most models make assume certain factors to be uniform.4. All points at equal distances to make condition equal for everyone5. All farmers act to maximize profits. – no morals or values difference6. The dietary preferences of the population are those of Germanic Europeans. – von Thunen was German. The model doesn’t account for non-German diets or customs
8 Major concepts: Distance from the city Preservation of food Think Bid-rent and transportation costPreservation of foodCan the crop be transported with spoilingAmount of spaceBid-rent – closer is more expensive
9 So……….Dairying and gardening of fruits and vegetables would be closer to the urban market while…Timber and firewood for fuel and building materials would be in the second zone – wood is needed constantly for warmth and cookingMixed farming, commercial grain and orchards andExtensive cattle ranching would be located farther away. Transportation is cheap: the animals can walk to the city for butchering.
10 Why?Some products spoiled more quickly, needed more sensitive transportation, or generate higher prices at marketThese products mean the farmer can afford higher land rent.
11 How does relative location affect land-use patterns Von ThunenEffectExplanationIntensive land – use near marketHigh Profit needed to pay rentWood and perishable / fragile products near marketHigh (Frequent) transportation to nearby marketExtensive agriculture (grain / grazing land) at the peripheryLow land rent or low transportation costs
12 Reasons Profitable options decrease with distance from the market Rent differences reflects different values of distanceProduction Costs + Transportation Costs = economic margin for a cropGreater the transport cost the less rent a farmer can afford
13 Contemporary Variables More efficient transportationTransportation cost no longer proportional to costsFirewood not a factor for heatingTechnology has reduced perish-ability refrigeration
14 It doesn’t always look the same: Modifications to the model to account for a physical disruption or second market center
15 Assume: NY is the only market – The above is 2 examples of how the US would satisfy the von Thunen model on the national scale.
16 Compare the national von Thunen model to the Whittlesey agricultural regions
17 How would this look for Europe? If London was the only market, what crops would be grown in which countries? – see Whittlesey’s regions on the next slide