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Urban Service Centres

• Cities as centres of...• Control• Production• Distribution over a homogenous

umland• uniform distribution pattern

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Central Place Theory:Explaining the Geography ofUrban Service Centres

• Model: noun, verb, adjective• Spatial model• Abstraction• Simplifying assumptions• Theoretical basis for urban (Central

Place) hierarchies• Walter Christaller The Location of

Central Places in Southern Germany(1933)

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Simplifying assumptions:• Land Area

• isotropic surface (flat / homogeneous)• unbounded plain• no variation in raw material distribution• equal ease of movement in all directions• transportation costs proportional to distance

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Simplifying assumptions:

• Population• Homogeneously distributed• Homogeneous demand

• Tastes/preferences• Spending• Behaviour

• Rational Economic Persons • aware of alternatives• producers=profit-maximizers• consumers=optimizing

• perfectly competitive market

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Market and Demand

• Market is a point location• Distributes its goods within a

market area.• Demand for good:

• Market price (fob market)• +• Cost of transport (to & from) market

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Distance

Q

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Demand

Distance

FLIP

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Q Demanded

Demand

Rea

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e p

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nit

Market

Threshold

Range

Threshold

Range

Market location

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DistanceQ

D

em

ande

d

Demand

Distance

FLIP

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Q Demanded

Demand

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Market

Threshold

Range

Threshold

Range

Market location

Spatial Demand Cone

RANGE:The spatial extent of demand before demand drops to zero

Increasing real price

8Distance

Q

De

man

ded

Demand

Distance

FLIP

Dis

tanc

e

Q Demanded

Demand

Rea

l Pric

e p

er U

nit

Market

Threshold

Range

Threshold

Range

Demand = zero

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Important definitions:

• Threshold:• minimum DEMAND (volume of sales) needed

for a business to stay in operation (and make a “normal” profit).

• Range:• maximum distance over which a good can be

sold from point P (i.e. where real price is low enough that people will travel to market to buy it)

• Profit = R - T• Threshold and range is the spatial basis

for profit

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Implications of the RANGE

R

T

M

Isotropic surface

Area of Extra Profit Min area required to stay in business (normal profits)

?Unmet demand for

same good or service