2. © 2011 Pearson Education, Inc. Chapter 12: Services

3. © 2011 Pearson Education, Inc. KI #1 Where Did Services Originate? Service = any activity that fulfills a human want or need and returns money to those who provide it Services are located in settlements –Location of services is important for profitability –Affluent regions tend to offer more services –Local diversity is evident in the provision of services

4. © 2011 Pearson Education, Inc. Three types of services –Consumer services About 44 percent of all jobs in the United States Retail, education, health, and leisure –Business services About 24 percent of all jobs in the United States Professional, financial, transportation –Public services About 17 percent of all jobs in the United States Fed, state, and local governments –In the United States, all employment growth has occurred in the services sector

5. © 2011 Pearson Education, Inc. Percentage of GDP from Services, 2005 Figure 12-1

6. © 2011 Pearson Education, Inc. Employment Change in the United States by Sector Figure 12-2

7. © 2011 Pearson Education, Inc. KI #2 Why Are Consumer Services Distributed in a Regular Pattern? Central place theory –First proposed by Walter Christaller (1930s) –Characteristics A central place has a market area (or hinterland) –Size of a market area (nodal region) Range Threshold

8. © 2011 Pearson Education, Inc. How far are you willing to drive for pizza? How far would you be willing to drive to see an oncologist that has a high success rate in treating leukemia with chemotherapy?

9. © 2011 Pearson Education, Inc. Central Place Theory The theory that explains the distribution of services, based on the fact that settlements serve as centers of market areas for services; larger settlements are fewer and farther apart than smaller settlements and provide services for a larger number of people who are willing to travel farther

10. © 2011 Pearson Education, Inc. CPT: Assumptions Area has no variation in topography or climate Rational behavior - people want to minimize distance they travel to obtain service Even distribution - of population & resources All consumers have similar purchasing power Equal competition between goods and services* Transportation costs are equal in all directions

11. © 2011 Pearson Education, Inc. Central Place Theory How do you calculate the market area, or hinterland of a given service? What shape would it be? Range Threshold

12. © 2011 Pearson Education, Inc. Low order services (bread, gas) High order services (mac store, Ferrari dealership)

13. © 2011 Pearson Education, Inc.

15. The maximum distance most people are willing to travel to use a service Gas Station vs Husker Football game Another example = McDonalds In an urban area like Lincoln, the range of a McDonalds is approximately 3 miles Range

16. © 2011 Pearson Education, Inc. What factors go into range? How many other people offer the service People think of range in terms of time, not distance

17. © 2011 Pearson Education, Inc. Threshold Minimum number of people needed to support a service Minimum number of people to do what???? Why do companies divide up space between stores?

18. © 2011 Pearson Education, Inc. Everyone can eat fast food But can everyone shop at Gucci or Louis Vuitton? Each service counts its customers differently Which customers inside the range do you count????

19. © 2011 Pearson Education, Inc. CPT: Relevance This is a model, not reality Use of hexagons explain hierarchy and interconnectedness of places Originally applied to Germany Found to be applicable in China and the Midwestern US

20. © 2011 Pearson Education, Inc. CPT: Limitations Large, contiguous areas of flat land rarely exist There are many forms of transport - cost does not equal distance People and wealth are not evenly distributed People do not always go to the nearest good or service Services and goods are not all equal competitors

21. © 2011 Pearson Education, Inc. So why use it? Use this idea of the equal distribution of services in planning new communities so that all people have access to important high order services and goods Just by looking at the model forces us to compare the model vs. reality - by explaining the difference we better understand the distribution of goods and services in urban settlements

22. © 2011 Pearson Education, Inc.

23. Friend, NE – Population 1,027. The median income for a household is $39,886. 4.8% of the population is below the poverty rate. Lincoln, NE – Population 258,379. The median income for a household is $48,846. 14.9% of the population is below the poverty rate. Chicago, IL – Population 2,707,120. The median income for a household is $47,371. 21.4% of the population is below the poverty rate.

24. © 2011 Pearson Education, Inc. Services Lab Activity We will examine the different types of services, market areas, and locations of services by plotting multiple services around the Midwest. The purpose of completing this activity is to identify how different types of services would likely appear in different types of cities, because they have different ranges, thresholds, and target demographics. On your Lab Activity Packet, you will complete each of the categories based on your research.

25. © 2011 Pearson Education, Inc. Things to think about …… Is there a pattern? Are there any services that can only be found in one town? Which ones? Why? Which kinds of jobs are more specialized? Why cant’ services count everyone within their range?

26. © 2011 Pearson Education, Inc. Rural Settlement Patterns Figure 12-10

27. © 2011 Pearson Education, Inc. Services in early urban settlements –Services in ancient cities Earliest urban settlements (e.g., Ur), Athens, Rome –Services in medieval cities Largest settlements were in Asia European cities developed with feudalism

28. © 2011 Pearson Education, Inc. Services in urban settlements –Differences between urban and rural settlements Large size High density Social heterogeneity –Increasing percentage of people in cities –Increasing number of people in cities

29. © 2011 Pearson Education, Inc. Percentage of Population Living in Urban Settlements Figure 12-14

30. © 2011 Pearson Education, Inc. Urban Settlements With Populations of at Least 3 Million Figure 12-15

31. © 2011 Pearson Education, Inc. “Daily Urban Systems” Figure 12-16

32. © 2011 Pearson Education, Inc. Market Areas, Range, and Threshold for Kroger Supermarkets Figure 12-18

33. © 2011 Pearson Education, Inc. Why Are Consumer Services Distributed in a Regular Pattern? Market-area analysis –Profitability of a location Compute the range Compute the threshold Draw the market area –Optimal location within a market Best location in a linear settlement Best location in a nonlinear settlement

34. © 2011 Pearson Education, Inc. Optimal Location for a Pizza-Delivery Service Figure 12-20

35. © 2011 Pearson Education, Inc. Why Are Consumer Services Distributed in a Regular Pattern? Hierarchy of services and settlements –Nesting Market areas in MDCs = a series of hexagons of various sizes –Rank-size distribution of settlements Primate city rule –Primate cities –Periodic markets

36. © 2011 Pearson Education, Inc. “If all the settlements of a country are ranked according to population size, the sizes of the settlements will be inversely proportional to their rank” Zipf The primate city is commonly at least twice as large as the next largest city and more than twice as significant. Mark Jefferson, 1939 The Law of the Primate City and the Rank-Size Rule

37. © 2011 Pearson Education, Inc. Rank Size Rule A country’s nth-largest settlement is 1/n the population of the largest settlement. For example –Second largest city is half the size of the largest. –Fourth biggest city is 1/4 the size of the largest. etc.

38. © 2011 Pearson Education, Inc. Rank-Size Distribution in the United States and Indonesia Figure 12-23

39. © 2011 Pearson Education, Inc. Rank-Size Rule: What does it mean for peoples’ lives? A regular hierarchy of settlements shows that the society has an even distribution of various order services - for example, it might only take someone living outside a city 10-15 minutes to reach a doctor. In LDC’s, unequal distribution means in some areas, people have to travel further to get higher order services such as medical care, eductaion, or Ferarris. Most people in LDCs don’t have cars - so they will have to travel likely for hours to obtain these services.

40. © 2011 Pearson Education, Inc. Primate City Rule MDC’s that follow the rank-size distribution among smaller settlements, but not among larger ones Primate City: largest settlement has more than twice as many people as the next biggest settlement.

41. © 2011 Pearson Education, Inc. Primate Cities Examples of Primate Cities: Paris (9.6 million) is definitely the focus of France while Marseilles has a population of 1.3 million. Mexico City, Mexico (21.2 million) is significantly larger than 2nd largest Guadalajara (1.6 million).

42. © 2011 Pearson Education, Inc. Bangkok – Example of a Primate City Urban Primacy - where the largest city is a many times larger than the second city. A huge dichotomy exists between Bangkok (5.9 million) and Thailand's second city, Nakhon Ratchasima (278,000).

43. © 2011 Pearson Education, Inc. Examples of Countries With Primate Cities France UK Mexico Thailand

44. © 2011 Pearson Education, Inc. Examples of Countries that Lack Primate Cities India U.S.A. China Canada Australia Brazil

45. © 2011 Pearson Education, Inc. KI #3 Why Do Business Services Locate in Large Settlements? Services in early rural settlements –Early consumer services met societal needs Examples = burial of the dead, religious centers, manufacturing centers –Early public services probably followed religious activities –Early business services to distribute and store food

46. © 2011 Pearson Education, Inc. Services in rural settlements –Half of the world’s population lives in rural settlements –Two types Clustered rural settlements –Circular or linear –Clustered settlements in Colonial America Dispersed rural settlements –In the United States –In Great Britain »Enclosure movement

47. © 2011 Pearson Education, Inc. KI #3 Why Do Business Services Cluster in Large Settlements? Hierarchy of business services –Services in world cities Business: clustering of services is a product of the Industrial Revolution Consumer: retail services with extensive market areas –May include leisure services of national importance due to large thresholds, large ranges, and the presence of wealthy patrons. Public: world cities are often the center of national or international political power

48. © 2011 Pearson Education, Inc. World Cities Figure 12-25

49. © 2011 Pearson Education, Inc. Business services in LDCs –Offshore financial services Two functions: –Taxes –Privacy –Back offices LDCs are attractive because of: –Low wages –Ability to speak English

50. © 2011 Pearson Education, Inc. Economic base of settlements –Two types: Basic industries Nonbasic industries –Specialization of cities in different services –Distribution of talent

51. © 2011 Pearson Education, Inc. Economic Base of U.S. Cities Figure 12-28

52. © 2011 Pearson Education, Inc. Geography of Talent Figure 12-29

53. © 2011 Pearson Education, Inc. KI #4 Why Do Services Cluster Downtown? CBD land uses –Central business districts (CBDs) –Retail services in the CBD Retailers with a high threshold Retailers with a high range Retailers serving downtown workers –Business services in the CBD

54. © 2011 Pearson Education, Inc. CBD of Charlotte, NC Figure 13-1

55. © 2011 Pearson Education, Inc. Competition for land in the CBD –High land costs Some of the most expensive real estate in the world = Tokyo Intensive land use –Underground areas Skyscrapers –“Vertical geography”

56. © 2011 Pearson Education, Inc. Activities excluded from the CBD –Lack of industry in the CBD Modern factories require large, one-story parcels of land –Lack of residents in the CBD Push and pull factors involved CBDs outside North America –Less dominated by commercial considerations.

57. © 2011 Pearson Education, Inc. The End. Up next: Urban Patterns