The Von Thünen Model

1. The Von Thünen Model The Von Thünen model of agricultural land use was created by farmer and amateur economist J.H. Von Thünen of Germany. He believed farmers were ‘economic men.” His model was created before industrialization and is based on the following 6 limiting assumptions:

2. 1. The city is located centrally within an "Isolated State" which is self sufficient and has no external influences. Von Thunen’s assumptions… 2. The Isolated State is surrounded by an unoccupied wilderness. 3. The land of the State is completely flat and has no rivers or mountains to interrupt the terrain.

3. 4. The soil quality and climate are consistent throughout the State. 5. Farmers in the Isolated State transport their own goods to market via oxcart, across land, directly to the central city. Therefore, there are no roads. 6. Farmers act to maximize profits.

4. The first von thunen model postulates that the intensity of production of a particular crop declines with distance from the market since transport costs increase with distance from the market and the locational rent is therefore lower. Intensive farming—which demands costly inputs—is only profitable where locational rent is high to cover costs, so intensive farming takes place only near the city.

5. Bid rent theory (this will also be used in the Urban Geography unit) Rent – a profit resulting from some advantage such as capitalization and accessibility. The highest rent is for retail because it is the closest to accessibility. Rent gradient – a representation of the decline in rent in distance from the center.

6. Von Thünen's second model is concerned with land use patterns. Transport costs vary with the bulkiness and perishability of the product. Product A is costly to transport but has a high market price and is therefore farmed near the city. Product B sells for less but has lower transport costs. At a certain distance, B becomes more profitable than A because of its lower transport costs. Eventually, product C, with still lower transport costs, becomes the most profitable product. The changing pattern of the most profitable produce is therefore seen as a series of land use rings around the city. This phenomenon may be illustrated by a graph showing the varying locational rent of three products, the most profitable product at each point, and the land use pattern which results.

7. Place each “product” where you think it would go and explain why. In no particular order, you products and locations are : Intensive agriculture Livestock Ranching City Forest Resources Grain Farming Your group will locate each of the following in the ring that you think will maximize its efficiency. Explain your reasoning for each of your choices.

8. There are four rings of agricultural activity surrounding the city. In an Isolated State with the foregoing statements being true, Von Thünen hypothesized that the following pattern would develop: • Dairying and intensive farming occur in the ring closest to the city. Since vegetables, fruit, milk and other dairy products must get to market quickly, they would be produced close to the city (remember, we don't have refrigerated oxcarts!)

9. Forest resources (Timber and firewood) would be produced for fuel and building materials in the second zone. Before industrialization (and coal power), wood (forest) was a very important fuel for heating and cooking. Wood is very heavy and difficult to transport so it is located as close to the city as possible.

10. The third zone consists of extensive fields crops such as grains for bread. Since grains last longer than dairy products and are much lighter than fuel, reducing transport costs, they can be located further from the city.

11. Ranching (livestock farming) is located in the final ring surrounding the central city. • Animals can be raised far from the city because they are self-transporting. Animals can walk to the central city for sale or for butchering.

12. Beyond the fourth ring lies the unoccupied wilderness, which is too great a distance from the central city for any type of agricultural product.

14. The Von Thünen model is an excellent illustration of the balance between land costs and transportation costs. This is also the basis for the “bid rent” theory.

15. As one gets closer to a city, the price of land increases. The farmers of the Isolated State balance the costsof transportation, land, and profit and produce the most cost-effective product for market.

16. The gradient is related to the marginal cost of distance from the center of the activity. The friction of distance has an important impact on the rent gradient because with no friction all locations would be perfect. Retailing would have the highest marginal cost, housing the lowest. The bid rent curve function – a combination of land prices and distances among with the individual (or firm) is indifferent. It describe the prices a household (or firm) would be willing to pay for accessibility.

17. Remember folks, in the real world, things don't happen as they would in a model. NOW FOR THE FUN PART > Create a model for Houston using Von Thunen’s model.