Servicesincludes:

Intro to ServicesCentral Place Theory

Urban Hierarchies

Introduction

Services

• any activity that fulfills human wants/needs• Services are located in settlements

– therefore our study of services is closely linked with our study of urban patterns

– location of services is important for profitability – affluent regions tend to offer more services – local diversity is evident in the services provided

Services• Three types of services

– Consumer services (44% of all US jobs)– Business services (24%)– Public services (17%)

• In the United States, all job growth is occurring in the tertiary sector

Percentage of GDP from Services, 2005

Figure 12-1

Employment Change in the United States

by Sector

Location of Contemporary Services• Services in urban settlements

– Differences between urban and rural settlements• Large size• High density• Social heterogeneity (cultural diversity)

– Urbanization• Increasing number of people in cities

– Most huge cities = LDCs (8 out of top ten largest urban areas)» Megacity = metro area > 10 million

• Increasing % of people in cities– MDCs more highly urbanized, higher % live in cities– The world is 50% urbanized – US = 50% urban in 1920, now 81%

Percentage of Population Living in Urban Settlements

Economic Base of MDC Cities• Basic industries

– Export mainly to consumers outside settlement– Unique collection = economic base

• Brings money into community• Stimulates growth of nonbasic but not vice versa• Calculated by % employed in different industries

– If higher than average for country = basic– MDC settlements are often classified by basic industry

• Nonbasic industries– Serve customers within settlement

Economic Bases of U.S. Cities(somewhat outdated)

Business Services Clustering in LDCs• What is attracting services to move to LDCs?• Offshore financial services

– Two functions:• Taxes• Privacy

– Cayman Islands• Back offices

– Offshoring of business/consumer services– LDCs are attractive because of:

• Low wages• Ability to speak English

– India, Malaysia, Philippines

Central Place Theory

Central Place Theory• Predicts how and where central places in a

urban hierarchy (hamlets, villages, towns, and cities) are functionally and spatiallydistributed

• Assumes that– Surface is flat with no physical barriers– Population and purchasing power are evenly distributed– Region has uniform transportation network – From any given place, a good or service could be sold in

all directions out to a certain distance

Central place theory– First proposed by Walter Christaller (1930s)– Characteristics

• A central place has a market area (or hinterland)– nodal/functional region = hinterland

• Nesting– Hinterlands in MDCs = series of hexagons of various sizes– Hamlet (crossroads), village (small cluster), town (larger cluster)

and city (multi-clustered)

– Size of each market area determined by:• Range

– Maximum distance consumer is willing to travel to use a service» Often expressed in time rather than spatial terms

• Threshold– Minimum # of consumers needed to support a service

Market areas or hinterland representative shapes

Central Place Theory

Market Areas, Range, and Threshold for Kroger Supermarkets

Why Are Consumer Services Distributed in a Regular Pattern?

– Optimal location within a market• Gravity model

– Optimal location directly related to # of people and inversely related to distance people must travel

• Best location in a linear settlement = median– Optimal Location for a Pizza-Delivery Service

Figure 12-20

Location ModelsWeber’s ModelManufacturing plants will locate where

costs of transportation, labor are the least

and agglomeration is beneficial

Theory: Least Cost Theory

Hotelling’s ModelLocation of an industry cannot be understood without reference to other industries of the same kind

Theory: LocationalInterdependence

Hotelling's model: (locational interdependence/spatial competition)

Location ModelsWeber’s ModelManufacturing plants will locate where

costs of transportation, labor are the least

and agglomeration is beneficial

Theory: Least Cost Theory

Hotelling’s ModelLocation of an industry cannot be understood without reference to other industries of the same kind

Theory: LocationalInterdependence

Losch’s ModelBusinesses choose locations where they can maximize profit

Closely related to Christaller’s Central Place Theory.

Theory: Zone of Profitability

Lösch's model: (zone of profitability/market zones)

Urban Hierarchies

World Cities– Services in world cities

• the entire world represents the hinterland for these cities• Business: clustering of services is a product of the Ind. Rev.

– shows dominance of core economies– headquarters of major corps., shipping hubs, finance, etc.

• Consumer: retail services with extensive market areas– leisure services of national importance due to large thresholds,

large ranges, and the presence of wealthy patrons.» Hollywood makes L.A. a “major” world city

• Public: world cities are often the center of national or international political power/policy making

– Classification has changed from “dominant, major and secondary” to “alpha, beta and gamma”

World Cities

Other classifications of urban settlements• Command and Control Centers

– Regional or sub-regional• Denver dominates the Mountain West

• Specialized Producer-Service Centers– Detroit = autos, San Jose = semiconductors

• Dependent Centers (rely on decisions made in World Cities)– Resort, Retirement and Residential = clustered in the South/West– Manufacturing = Old Rust Belt– Military = clustered in the South/West– Mining = mineral rich areas (California, West Virginia)

• Talent magnets– Richard Florida = distribution of talent follows cultural diversity– “cool” cities get brain gain, “uncool” place suffer from brain drain

Hierarchy (nesting) of services within Central Place Theory

• hamlet – very short range, very small threshold– daily necessities

• gas, bread, milk, cigarettes• convenience store, gas station, etc.

• village – short range, small threshold– weekly needs

• hardware store, post office, dry cleaner, elementary school, diner• town – medium range and threshold

– occasional use• medical services (doctor, dentist, clinic), movie theater, restaurant,

high schools (buses), etc.• city – long range and threshold

– special occasions• sporting events, concerts, specialists, surgery, high end retail

Geography of Talent

Rank-Size Rule vs. Primate City • Rank-size rule: population of the settlement is

roughly inversely proportional to its rank compared to largest city. For example:

• largest city = 12 million• 2nd largest = 6 million (biggest test!!!!)• 3rd largest = 4 million• 4th largest = 3 million

– “regular” hierarchy implies higher a more evenly dist. wealth can support services outside of dominant city = MDCs

• Primate city: leading city is disproportionately (>> 2x) larger than other cities– “irregular” = low wealth, so services cluster in 1 place = LDCs

– exception = Europe (has many primate cities despite wealth)• PLEASE: when applying these rules be reasonable, look at

overall pattern before making a judgement!

The End.

Up next: Urban Patterns