Central Place Theory
A central place is a market center for the exchange of goods and services by people attracted from the surrounding area. The central place is so called because it is centrally located to maximize accessibility from the surrounding region. Central places compete against each other to serve as markets for goods and services, according to central place theory.

The geographic concept of central place theory explains how services are distributed and why a regular pattern of settlements exists, at least in a MDC such as the United States. Central Place Theory was first proposed in the 1930s by German geographer Walter Christaller, based on his studies of southern Germany. August Losch in Germany and Brian Berry and others in the U.S further developed concepts during the 1950s. The theory applies most clearly in regions such as the Great Plains, which are neither heavily industrialized nor interrupted by major physical features such as rivers or mountain ranges.

In regards to human geography, central place theory is another way to help predict how cities grow and develop. Nodal regions such as market areas and locations of resources and certain activities are also pointed out by central place theory. Central place theory helps in answering why certain consumer services are distributed in a regular pattern, as observed in actual cities.

Christaller postulated:
Cites would be regularly spaced w/central places where the same product was sold at the same price was a standard distance apart
Each city has a complementary region in which they have a monopoly on the sale of certain goods

Many of the assumptions that go with this model are similar to the ones in the von Thunen Model.
To develop the theory, Christaller made the following simplifying assumptions:
* an unbounded isotropic (all flat), homogeneous, unbounded limitless surface (abstract space)
* an evenly distributed population
* all settlements are equidistant and exist in a triangular lattice pattern
* evenly distributed resources
* distance decay mechanism
* perfect competition and all sellers are economic men maximizing their profits
* consumers are of the same income level and same shopping behavior
* all consumers have a similar purchasing power and demand for goods and services
* Consumers visit the nearest central places that provide the function which they demand. They minimize the distance to be travelled
* no provider of goods or services is able to earn excess profit(each supplier has a monopoly over a hinterland)
* there is only one type of transport and this would be equally easy in all directions
* transport cost is proportional to distance traveled in example, the longer the distance traveled, the higher the transport cost

Threshold, Range, and Hinterlands
Central Place Theory also relies on these concepts:
Threshold — size of population required to make provision of the service economically feasible
Range — average maximum distance people will travel to purchase a good or service
Hinterlands — large tributary trade areas associated with central places that offer many services. In other words, the area surrounding the city that interacts with it in regards to services
Because range of central goods and services varies, tertiary centers are arranged in an orderly hierarchy
1.At the top are regional metropolises that offer all services associated with central places, and that have large hinterlands
2. At the bottom are small market villages and roadside hamlets that may contain nothing more than a post office, service station, or cafe
3. Between the two extremes are central places of various degrees of importance
4. Each high-ranked central place offers all goods and services of next lower ranked place, plus at least one or two more
Crucial to his theory is the fact that different goods and services vary both in threshold and range. Larger number of people required to support a hospital, university, or department store than a gasoline station, post office, or grocery store. People are willing to travel farther to consult a heart specialist, record a land title, or purchase a car than to buy a loaf of bread or mail a letter.

Which are Higher Order and which are Low Order Goods?
The higher the order of the goods and services (more durable, valuable and variable), the larger the range of the goods and services, the longer the distance people are willing to travel to acquire them.

Examples for low order goods and services are: newspaper stalls, groceries, bakeries and post offices. They are supported by a smaller threshold population and demand. Examples for high order goods and services are: jewelry, large shopping arcades and malls. They are supported by a much larger threshold population and demand.

The Model
Why are hexagons used in theory to delineate market areas:
1.Circles are equidistant from center to edge, but they overlap or leave gaps.
2.Squares nest together without gaps, but their sides are not equidistant from the center.
3.Geographers use hexagons to depict the market area of a good or service, because hexagons offer a compromise between geometric properties of circles and squares.

Sunbelt Phenomenon
-Many Americans have moved south in the last decades.
-As cities grew and newer places were created, they seemed to follow a pattern consistent with the ideas of Central Place Theory. Phoenix rises in stature and other places nearby reflect the idea that it is a central place of a higher degree.
-Atlanta is another example of this
-The south has developed in recent decades and become increasingly urban as it is part of an MDC, has an increasing number job opportunities and for its climate.

Another View

Christaller’s Assumptions
He noted that centralized areas tend to be spaced apart so that each had a monopoly on providing certain services
All central places were a part of a system of counterparts that spread across an area
Larger central places controlled a larger area /Smaller central places controlled smaller areas
Evenly distributed population and resources
The countryside in the areas he studied would be flat, so no barriers would exist to interfere people’s movement across it
Human Behavior Assumptions
Humans will always purchase goods from the closest place that offers it
Whenever demand for a certain good is high, it will be offered in close proximity to the population.
When demand drops, so does availability
All settlements are equidistant and exist in a triangular lattice pattern
Consumers have same income level and shopping behavior
Have similar purchasing power and demand for goods and services
Visit nearest central places that provide what they need.

Market Area/Hinterlands
The area surrounding a service from which customers are attracted is the market area/hinterland. This is a large tributary trade area that is associated with central places that offer many services. EX: since people get services from the nearest location, consumers near the center of the circle obtain services from local establishments. The closer to the periphery of the circle, the greater the percentage of consumers who will choose to obtain services from other nodal regions.


Size of Market Area/Hinterland
To determine the extent of a market area, geographers need a service’s range and threshold.
The maximum distance people are willing to travel to use a service or purchase good
A Convenience store has a small range, whereas a baseball stadium has a large range.
The range is the radius of the circle drawn to outline a service’s hinterland
To determine the range, geographers observe consumer behavior
How far the typical customer is willing to travel for various services
The minimum number of people needed to support the service
Low-order goods
Things used frequently, like food and routine household items
These items are purchased regularly so small businesses in small towns can survive because people will buy at the closer locations instead of going into the city.
High-order goods
Specialized items, like cars, that are not often bought
Since people do not purchase them regularly, many businesses selling these items cannot survive in areas where the population is small.
They locate in larger cities with a large population

Hierarchy of Tertiary Centers
At the top are regional metropolises
Offer all services and have large hinterlands
At the bottom are small market villages and roadside hamlets

The central place is located at the vertexes (points) of equilateral triangles. They then serve the evenly distributed consumers who are closest to the central place. As the vertexes connect, they form a series of hexagons- the traditional shape in many central place models. This shape is ideal because it allows the triangles formed by the central place vertexes to connect and it represents the assumption that consumers will visit the closest place offering the goods.