AP Human Geography

Central Place Theory

Central Place Theory

Based on the work of Walter Christaller, a German geographer

In 1933, Christaller wrote his doctoral dissertation in geography entitled, The Central Places of Southern Germany.

In it, he proposed CPT

Central Place Theory: Some Basic ideas

Central places are nodes for the distribution of economic goods and services to surrounding nonurban populations

Central places compete against each other; this competition creates the regular pattern of settlements

Each settlement has a market area, the region from which customers are drawn.

Hexagons rather than circles are used to indicate market areas.

Central Place Theory Cont’d

Smaller settlements occur more frequently and are closer together, while larger settlements occur less frequently and are farther apart.

Small settlements provide goods and services that have small thresholds and ranges; large settlements provide goods and services that have large thresholds & ranges.

The good or service provided in a central place has an order (high or low) based on how specialized it is.

Market Area

The area surrounding a service from which customers are attracted is the market area or hinterland.

It is a good example of a nodal or functional region- a region with a core, where the characteristic is most intense.

Size of Market Area

Range- the maximum distance people are willing to drive to use a service

Threshold- the minimum number of people needed to support the service (customer base)

Assumptions

No topographic barriers No difference in soil fertility Population & purchasing power evenly

distributed People with similar lifestyles and incomes Uniform transportation network Purchase of goods & services at the

nearest center

What are the advantages of central place theory?

Does a reasonably good job of describing the spatial pattern of urbanization. No economic theory explains why there is a hierarchy of urban centers.

Provides a description of the relationship between a central place-higher order place and its tributary areas-lower order places.

Does a good job of describing the location of trade and service activity.

The Real World

Physical barriers, resource distributions, etc. create modifications of the spatial pattern.

Some areas tend to confirm the model Christaller stimulated urban and economic

geography in general and location theory in particular.

Conclusions

Christaller’s conclusions:

1. Towns of the same size are evenly spaced because they are in the center of liked-sized market areas. Larger towns will be farther apart than smaller towns b/cause their market areas are larger.

2. Distribution of cities, towns, & villages in a region is related to trade areas, pop. size, and distance

Rank Size Rule

Holds that in a model urban hierarchy, the pop of a city or town will be inversely proportional to its rank in the hierarchy

For example, if the largest city has 12 million people, the 2nd largest = 6 million (1/2); 3rd largest = 4 million (1/3);

Rank size rule does not apply to all countries, esp. countries w/one dominant city, e.g., France, England, Japan, Mexico, etc.

Primate City Rule According to primate city rule, the largest

settlement has more than twice as many people as the second-ranking settlement.

Examples: Paris, France; London, United Kingdom; Mexico City, Mexico, etc.

Pros-lg. market for goods/services/information, compete on a global scale & attract foreign investment, lg. threshold=better services, transportation

Cons-unequal distribution of investments, wealth, transportation & resources; brain drain, slums, environmental impact

Where are Business Services Distributed?

Cluster in urban settlements Global or world cities have lg. #s of business services for

many reasons: Headquarters of lg. corporations are clustered in global

cities Lawyers, accountants, & other professionals cluster there

to provide advice to major corporations & financial institutions

Advertising agencies, marketing firms, etc. concerned w/ style & fashion locate in global cities to help corporations anticipate changes in taste & shape those changes

Where are Business Services Distributed? Global cities are centers for finance & attract major

banks, insurance co., etc. Global cities are divided up into 3 levels:

Alpha, beta, gamma Ex. alpha++ city= NYC and London

alpha+ city= Chicago, Tokyo, Hong Kong

Where are Business Services Distributed? Combination of economic, political, cultural, & infrastructure

factors are used to identify global cities

Economic factors: # of headquarters for multinational co., financial institutions, & law firms

Political factors: hosting headquarters for international org. & capitals of countries that play lead role in international events

Cultural factors: cultural institutions, media outlets, sports facilities, educational institutions

Infrastructural factors: major international airports, health care facilities, & advanced communication systems

Where are Business Services Distributed? New forms of transportation & communication were expected to

reduce the need for clustering of services in lg. cities: Telegraph & telephone in 19th century and the computer in

the 20th century RR in 19th century & motor vehicle and airplane in 20th

century These new technologies have reinforced rather than

diminish the primacy of global cities Characteristics of global cities: tend to have busy harbors &

airports and lie at the junction of RR and highway networks

Consumer & Public Services in Global Cities

Retail services w/ extensive market areas

Lg. # of wealthy ppl, so luxury & highly specialized products are especially likely to be sold there

Offer more plays, concerts, operas, night clubs, restaurants, bars, professional sporting events, libraries, museums, etc.

Leisure activities cluster in global cities b/c they require lg. thresholds and lg. ranges, & need for wealthy patrons

Most are national capitals w/ gov’t and related services Ex. NYC is not but houses United Nations headquarters;

Brussels, Belgium center for European Union activities

Business Services in Developing Countries Developing countries usually specialize in 2 distinctive types of

business services: offshore financial services & back-office functions These services are located here for reasons such as

supportive laws, weak regulations, & low wage workers Sm. Countries (islands/microstates) offer offshore financial

services. Off shore centers provide 2 important functions:

Taxes: taxes on income, profits, & capital gains are typically low or non-existent

Companies incorporated in an offshore center also have tax-free status, regardless of the nationality of owner

Companies are able to conceal their assets & countries lose out on millions/billions of tax revenue

Privacy: bank secrecy laws can help individuals & businesses evade disclosure in their home countries Creditors cannot reach such assets in bankruptcy hearing Short statues of limitation protect offshore accounts from

long-term investigations

The International Monetary Fund, UN, & Tax Justice Institute identify the following places as offshore financial services centers: Dependencies of the UK: Anguilla, Cayman Islands,

Montserrat, British Virgin Islands, Gibraltar off Spain Dependencies of other countries: Cook Island controlled by

New Zealand, Aruba & Curacao controlled by the Netherlands, Hong Kong & Macau by China

Independent countries: Barbados, Grenada, Turks & Caicos, Samoa, Mauritius, Seychelles , Ireland, Liechtenstein, Costa Rica, Lebanon, United Arab Emirates, etc.

Cayman Islands

Several hundred banks w/ assets of more than $1 trillion are legally based there

Most banks have only a handful of ppl, if any, working in the Caymans

Crime to discuss confidential business learned on the job in public

Offshore assets are not covered by lawsuits originating in the U.S., so additional lawsuits would have to be made & privacy laws can shield individual/corporation from undesired disclosures

Back Office Functions (business process outsourcing or BPO) Includes insurance claims processing, payroll management,

transcription work, & other clerical activities

Also as centers for responding to billing inquiries related to credit cards, shipments, claims, technical support for things like installation, operation, & repairs

High rent prices in downtown global cities has induced business services to move routine work to places in suburbs or nearby sm. Towns

Selected developing countries have attracted back offices for 2 main reasons: Low wages and ability to speak English

Economic Base of Settlements: Settlement’s distinctive economic structure derives from its

basic industries (export primarily to consumers outside settlement)

Nonbasic industries: enterprises whose customers live in the same community, essentially, consumer services

Community’s unique collection of basic industries defines its economic base

Exportation of basic industries brings $ to local economy, thus stimulating more nonbasic consumer services for the area

New basic industries attract new workers to the settlement The settlement then attracts additional consumer services to

meet the needs of the new workers New basic industries stimulates new nonbasic industries but not

visa-versa

Economic Base of Settlements: Basic industries can be computed by the % of the community’s

workers employed in different types of businesses % of workers employed in a particular industry in a settlement is

then compared to the % of all workers in the country employed in that industry

If % is much higher then it is a basic economic activity for that settlement

Settlements can be classified by their basic activity such as: manufactured goods (steel, cars) located btw. Northern Ohio

& SE Wisconsin and Great Lakes nondurable manufactured goods (textiles, apparel, food,

chemicals, paper) in SE, especially the Carolinas

Economic Base of Settlements: Other examples

computer and data processing in Boston and San Jose High-tech industries support services: Austin, Orlando, Raleigh-

Durham Military activity support services: Albuquerque, Colorado Springs,

Knoxville, Norfolk Management-consulting: Washington D.C. Entertainment/Recreation: Atlantic City, Las Vegas, Reno Medical: Rochester, Minnesota Public Services: state capitals like Sacramento and Tallahassee,

Arlington for military bases

North and Eastern states have expanded their business services more rapidly

ex. Cleveland & Pittsburgh once relied on steel production but now rely on health services such as hospitals, medical high-technology

Distribution of Talent

Some cities have higher % of talented individuals than others Ex. Raleigh-Durham, Washington D.C.,

Austin, Colorado Springs, Boston, San Francisco, Seattle

Enticement of cultural rather than economic reasons bring talent to these cities

Services in rural settlements:

Rural settlements are either clustered or dispersed Clustered rural settlement includes homes, barns,

tool sheds, & other farm equipment plus consumer services (religious structures, schools, shops)

Usually has a commons areas Villages or hamlets are clustered rural settlements Brings about a sense of community

Ex. New England colonists & their focus around the Church

Services in rural settlements:

Dispersed rural settlements: More individual areas w/ lg. chunks of land Typical of Middle Atlantic colonies settled by

groups like the Germans, Dutch, Irish, Swedish, etc.

Dominates the American Midwest where land was plentiful & cheap

Enclosure movement in England is a good ex. of dispersed rural settlements