4.

LOCATION OF ECONOMIC ACTIVITY

4.1 LOCATION OF ECONOMIC ACTIVITY :
What do we mean by the term “Economic Activity” ? Well, it means the activities
related to production, exchange and consumption of goods, services and
information on the rotating earth and in universe. These activities take place in
the context of some geographical location on the earth’s surface and outer space.
The location where these activities take place is called the location of economic
activity. The economic activity may be related to any one or all the three aspects,
i.e., production, exchange and consumption.
4.2 LOCATION OF PRIMARY, SECONDARY , TERTIARY , QUATERNARY AND
QUINARY PRODUCTION :

First of all, lets know the types of production economic activities. Hartshorne and
Alexander have given five broad categories of production economic activities as
follows :
(i)

Primary

(ii)

Secondary

(iii)

Tertiary

(iv)

Quaternary

(v)

Quinary

(i)

PRIMARY PRODUCTION :
It includes hunting, fishing, gathering, mineral extraction, and harvesting
of trees. This is called red collar activity.

(ii)

SECONDARY PRODUCTION :
It includes those activities which increase the value or usefulness of a
previously existing product by changing its form.

It includes

manufacturing and commercial agriculture. It is called blue collared
activity.
(iii)

TERTIARY PRODUCTION :
It includes the service sector rather than the goods. It includes personal
and business services provided by retail clerks, barbers, beauticians, and
secretaries. It is called pink-collared activity.

(iv)

QUATERNARY PRODUCTION :
It includes professional and administrative services characterised by
specialised technical, communication, motivation, and leadership skills
provided in specialised environment like schools, theatres, hotels,
hospitals. It includes financial and health service, information processing,
teaching, government service, and entertainment activities. It is called
white collar activity.

(v)

QUINARY PRODUCTION :
It includes chief executive officers and top management executives both in
government and private sectors. It is characterised by a very high degree
of analytical and managerial activities in larger urban ,university, medical
and research centres. It includes research scientists, legal authorities,
financial advisers, strategic planning and problem solving professional
consultants. It is called gold collar activity.

1.

Flow chart showing increasing order of complexity and specialised
nature of economic production activity.

Primary

Secondary

Tertiary

Quaternary

Quinary

2.

Graphical Hypothetical simplified Representation of the complexity and
specialisation involved in different productions :

Degree of Complexity
and Specialization

Y

10
9
8
7
6
5
4
3
2
1
0

3.

.
.
.
.
.
.
.
.
.
. .
.

.
.
.
.

.

.

.

.

X

Primary Secondary Tertiary Quaternary Quinary

LOCATION :
Location of primary, secondary and tertiary production is determined by
numerous factors like historical, cultural and physical. Different theories have
been advanced by different economists and geographers to explain this
phenomenon of location of production activity. Von Thonen’s model tries to
explain the location of primary activities. Alfred Waber’s model tries to explain
the location of industrial units or the secondary production. Walter Christaller’s
theory tries to explain the location of tertiary production like retail business
activity. No theory is perfect or Universally valid.
It is to be noted that primary activities can be undertaken on a commercial basis,
too., for example, primitive people carry out subsistence type of primary activities
,whereas modern human beings

especially Europeans have undertaken these

activities like fishing and forestry on a commercial basis with the help of modern
scientific and technical knowledge and gadgets.

4.3 VON THUNEN’S MODEL
1. INTRODUCITON:
J.H. Von Thunen, himself a prosperous and successful owner/manager of a large estate in
Mecklenburg made an attempt to explain agricultural land use pattern in economic terms by
publishing ‘Der Isolierte Staat’ (The Isolated State) in 1826 based partly on his
observations in that locality. His attempt/model called ‘Von Thunen’s Isolated State’

model is an example of a normative model and is partly based upon empirical evidence
relating to the economic conditions in the early 19TH century.

2. ASSUMPTIONS :
Like all other theorists, he made certain assumptions, too for the sake of simplicity like:
i.

Isotropic surface within the isolated state.

ii.

All surplus production was sold in a single city upon which all communications
converged.

iii.

Use of a single form of transport (horse-drawn carts)

iv.

Direct proportional relation of transport costs to distance.

v.

Concentric zones of differing production and the city.

vi.

Presence of a hypothetical area called ‘an isolated state,’ surrounded by an
uncultivated wilderness and having no trade connections with outside areas.

vii.

Existence of a rational human being.

3. EXPLANATION:
A. Von Thunen argues that 3 factors influence the type of agricultural production at any
particular locations
i.

Distance to market.

ii.

Selling price of product at the market.

iii.

Land rent, which is regularly equivalent to economic rent in classical economics
described earlier in 1817 by British economist David Ricardo. Economic rent is
the revenue a farmer receives after deducting the cost of production of a
commodity or it is the monetary return from an area which can be obtained above
that which can be received from land which is at the margin of production.

B. According to Von thunen ,perishable items in strong demand and those products
with high transportation costs get located close to the city. These items could
compete favourably on higher priced land near centre because of higher market
prices. Less perishable products with lower transport costs and lower market
prices predominate with increasing distance from the market. Extensive
agriculture, including grazing, replaced more intensive grain production and
general farming in most distant remote locations.
However, distortations crop up in this highly idealized model. For example, in
figure (b), presence of a navigable river and a second market centre has distorted
the model which calls for further investigations into the reasons responsible for
this deviation.
A. The following diagram shows Von Thunen’s concept of economic rent:
X

Y
Price for one
hectare of
production
A
0
(City)

B

C

Distance from 0
increase

Von thunen assumed that quality of land varies not with fertility, but with respect
to location or distance. The land is assumed to be of uniform fertility and crop
yields equal in all areas, but the return on agricultural produce (XY) declines with
increasing distance from the city (0) due to the grater cost of transporting crops to
the market. In the figure above, the shaded portion means the economic rent of A
and B if the next distant location is farmed.

4. APPLICATION:
A bid rent curve clearly shows the relationship between economic rent and
distance from the market for one or several products. The basis for rings of
production around the market can be determined by comparing the bid-rent curves
for two products.
The bid – rent curve is the line showing the economic return at varying distance
from the market. It slopes down to the right for each product, since additional
transport costs occur with greater distance from the market. For example, item
located at the market would cause no transportation costs. Economic rent would
decrease in direct proportion to transportation costs - increases at any given
distance away from the market. We can find the height of the curve at any
distance by subtracting production and transportation costs from the price
received for the item at the market. Figure (a) shows the economic rent return
from a ton of Bajra at the market as Rupees 100. We can determine this figure by
subtracting the cost of production (Rupees 100) from the selling price at the
market (Rupees 200), yielding an economic rent of Rupees 100. The rent
decreases in direct proportion to the transportation charge at any distance from the
market. Let us assume that transportation costs are Rupees 20 per kilometer. 2
kilometer from the market, an additional Rupees 40 decrease in rent occurs .we
are therefore left with a return of Rupees 60 only.

150
Economic Rent
(Rupees)

100

Bajra

50

Market
(Pune)

0

2
Kilometre

Figure (a)

5

150
Economic Rent
(Rupees)

Cauliflower
100
60
50
Market 0
(Pune)

Bajra
2

3

5 Kilometre
Bajra Zone
Cauliflower Zone

Figure (b)
At 5 Km, with an additional transport charge of Rupees 60, the rent becomes zero,
making it uneconomical to produce Bajra at any greater distance from the market, where
returns would become negative. Production area would contract/expand with any
increase/decrease in the market prices or any charges in transportation cost. The bid-rent
curve would become steeper and contract the production area with increase in
transportation costs. The curve would be flattened with a decrease in rates, encouraging
production at greater distances.
Figure (b) helps find the basis for rings of production around the market (Pune). It shows
a bid-rent line for two products Bajra and Cauliflower. The curve for Cauliflower starts
out in a higher position than the Bajra curve because its market price is significantly
higher than

that for Bajra

(Rs. 260), more than offsetting the increased cost of

production (Rs. 110). A return of Rupees 150 is found at the market. Transportation costs
for Cauliflower is higher than that for Bajra. 2 Kilometer from the market, Rupees 90 is
the transportation charges, leaving economic rent at Rupees 60. At 5 Kilometer from the
market, another Rupees 135 charge occurs, with rent level going below zero! When these
points are connected, it is seen that it is uneconomical to produce cauliflower beyond 2
Kilometer from Pune market, because at greater distances Bajra becomes more profitable.
The highest return would be given by the curve in top position at any given distance from
the market. Thus, cauliflower would be produced closest to the Pune market and Bajra
farther away.

5. CRITICISM:
a.

NEGATIVE:
(i)

Von thunen simply re-invented the wheel, because his concept of land rent
is quite similar to economic rent model of David Ricardo who had
described the same 9 years before Von thunen put forward his concept. Of
course, Von thunen himself was unaware of Ricardo’s economic rent
concept. Instead of basing his model on soil infertility, he assumed equal
fertility and based it on location or distance. One can see similarity
between Ricardo & Thunen’s models from the following concept of
Ricardo of economic rent based on the assumption of declining soil
fertility with increasing distance from the city.

2.0
1.5
Yield
(tonne per
hectare)

1.0
0.5

A
City

0

B

C

Quality of land decrease

“A” is an area of cultivation close to a city (0). The yield for a given crop is 2.0 tonnes
per hectare. With the expansion of city and its market for products, cultivation gets
extended to area “B”, which is located further away from the city and is considered
having a lower fertility. The yield is 1.5 at location B. So, the economic rent of “A” is 0.5
tonnes per hectare (2.0 -1 .5 = 0.5).

When area “C” is put under agricultural production, and yield 1.0 tonne per hectare, then
the economic rent of “A” and “B” would be 1.0 (2.0

1.0 = 1.0) and 0.5(2.0 – 1.5 = 0.5)

respectively.
(ii)

His assumptions are not universally true.

(iii)

His model is anachronistic, outdated, irrelevant to contemporary economic
spatial scenario.

(iv)

All operators, i.e., agriculturists don’t have complete information.

(v)

All operators are not necessarily rational – decision makers.

(vi)

All operators differ in their evaluation of the land and the definition of
remuneration for their work.

(vii)

All operators need not necessarily make rational choices of crops, live
stock.
(viii) All operators need not seek to maximize their return from their lands.

(ix)

All the above factors distort symmetry of the model.
(x)

Model is applicable only mainly to commercial agricultural patterns found
in North America and Western Europe.

(xi)

Forests belts are no more so important as to warrant proximity to a city in
view of technological advancements in the field of energy generation.

(xii)

Being a normative model, it suffers from all the shortcomings of such
models.
(xiii) Changes in transportation/refrigeration have destroyed the symmetry of
land use systems around central markets, since the early 19TH century.

B.
POSITIVE:
1.

It was one of the earliest pioneering approach which attempted to explain
agricultural land use patterns in economic sense.

2.

It helped put geography on a sound scientific footing.

3.

Von Thunen himself pointed out that his work was essentially a method of
approach to the complex subject of agricultural location and that while his
findings had no claim to universality, the methods by which they were obtained
could be applied generally.

4.

The model is applicable at all scales, i.e.,

local, regional or global (as M.

Chishdin pointed out). Study was done in Uruguay applying this model to
agriculture.
5.

Shortcomings of the model prompted newer theories to solve the question of
decision making at the level of the individual farmer like ‘Game Theory’.

6.

CONCLUSION:
To conclude in the words of J.R.Peet,
“While transport costs continue to form a major part of the total costs of
producing and marketing crops, at least some semblance of a concentric zonal
system remains.”

4.4 ALFRED WEBER’S MODEL
1.

INTRODUCTION:
Alfred Weber attempted in 1909 to develop a theory based on least cost with
respect to transport ( collection of raw materials and distribution of finished
products ) and processing (labour, power, capital, services ) assuming that the
manufacturer would best locate where the sum total of these cost is least . To find
the least cost location ,it is necessary to examine spatial variation in this cost and
to examine the cost structures of different industries, because a location with low
labour cost will not be very attractive to an industry with a small labour cost
component such as oil refining and an area with high labour costs and cheap
power will not attract industries with a high labour, low power component such as
textiles. Alfred Weber tried to find this spatial point of least cost. His model tries
to explain the location of secondary production.

2)

ASSUMPTIONS:Alfred Weber, inter alia, assumed uniform demand for a product at all locations,
resulting in a uniform price; presence of an isotropic surface, a rational well
informed human being, perfect competition; and therefore the plant located at the
point of least costs would get the highest profits. Occurrence of raw materials/
labour/markets at specific places only, and immobility of labour supply available
unlimited at aspecific wage level.

3)

(i)

PRINCIPLES:He examined one by one the following:
(i)
Least Transport Costs
(ii)
Labour Costs
(iii) Tendency to Agglomerate.
LEAST TRANSPORT COST:He tried to find first the least transport cost location which he considered
the most important influence,using a ‘locational triangle’.

1 Tonne

C

C
2 Tonne

2 Tonne
P

1 Tonne

P
M1
a. Weight losing
industryindustry

M2

M1
b. Weight gaining
industry

M2

Reality is simplified to two raw materials M1 and M2 and one common
consumption point C. The least transport cost point P, is the point at which the
total cost of moving raw material and finished products is least. These transport
costs are calculated by multiplying the weight of material or product by the
distance carried, resulting in a ‘pull’ being exerted on the production point by
each of the corners of the triangle.
In the above figure(a), 2 tonne of material M1 and 2 tonne of material M2 are
needed to produce 1 tonne of finished product. In a weight-losing manufacturing
process such as iron smelting, the least transport cost location is near to the
sources of the raw material. But, in figure(b), one tonne of material M, and1 tonne
of material M2 are needed to produce 2 tonnes of finished goods. In a weight
losing industry such as backing a market oriented location is attractive. The only
raw materials that are localised and not ubiquitous will have a locational effect.
(ii)

LABOUR COSTS:He considered that industries would be located away from the point of least
transport costs to the point of least labour costs if savings in labour costs were
greater than any additional transports costs.
In the following figure (c), P is the least transport cost point, and around this point
a series of isodapanes (cost contours) or lines of equal transport cost per unit of
production from P are drawn. Cheap labour at L1 & L2 would reduce costs by
15p per unit of production, and manufacturer has to decide whether it is useful to
relocate from P to take advantage of it. Surely, any location within the 15p
transport isodapane would save more on labour than would be spent on extra
transport and therefore L1 would be a more profitable location than P. Location at
L2 would increase transport costs more than any saving in labour costs. With
efficient transport, labour costs rise and transport isodapanes move further apart.

(iii)

TENDENCY TO AGGLOMERATE:-

After combining transport and labour effect, he examined the effects of industry’s
tendency to agglomerate. In figure(d), A,B,C,D, and E are least cost location , but

industrial units located there could cut their production costs by £1 per unit of
production if at least 3 of them operated in the same location. But they must not
incur increased transports cost of over £1 per unit of production. Figure(d) shows
the critical isodapane of £1 drawn round each producer and it also shows that
units C,D,E could reduce their total costs by locating in the shaded portion/area.
Same is for C,D,A and ABD.

4)

CRITICISM:(i)

POSITIVE:(a)

Weber’s model has validated in several studies like W. Isard’s
work on the US steel industry and W. Smith’s work on weightlosing industries in Britain.

(b)

It is a pioneering theory.

(c)

It has influenced a large number of later writers.

(d)

It gave rise to Maximum Revenue theory as a reaction to its
neglect of the demand aspect .

(e)

It shows that intermediate plant locations between the raw material
and market locations are undesirable because they induce higher
costs of production due to the effect of increased freight rate
charges.

(f)

More realistic behavioral and structural theories have come in
vogue to supplement this classical theory like spatial Margins
theory combining both the production and the demand aspects.

(ii)

NEGATIVE:a)

It holds demand constant at a point. It ignores the locational
interdependence of units.

b)

It is too abstract, and emphasizes economics instead of space.

c)

It has obvious limitations.It is deterministic .It fixes location.

d)

Presence of an isotropic surface, rational human being, full
knowledge, perfect competition are a fallacy.

e)

It ignores MNCs creating their own markets/infrastructure.

f)

It helped capitalists maximize their profits and exploit the labour
class cold bloodedly.

g)

Weber did not discuss variations according to the stage of
production, i.e., raw material and final product transfer costs.
Hoover noted that the raw material shipmant rates often fell below
those of finished goods due to increased fragility and higher
packing and hanling costs for manufactured items.

h)

He failed to acknowledge the advantage of “break of bulk”
location advantage.

i)

He failed to recognise various systems like capitalism/socialism
and other similar differences.

j)

He ignored disadvantages of agglomeration like space problem,
energy crisis, etc.

1.

CONCLUSION:
To conclude in the words of KNOWLES AND WAREING,
“His assumptions about transportation rates and the effect of agglomeration have
been questioned, but the theory is important because of its pioneering nature
and its effects on later writers”.

SOME ADDITIONAL POINTS:
1.

A. Weber propounded his views in a book titled “Theory of the location of
industries” translation of 1909 original edition in German.

2.

He distinguished between 2 types of materials to determine minimum cost
locations:
(A)

(B)

{i}

weight losing (gross materials)

(ii)

Non – Weight losing (Pure Materials).

(i)

Localized Material(Restricted availability)

(ii)

Example:

Mineral processing activity.

Location:

(Near Raw Material.)

Ubiquitous Material (Available everywhere)
Example:

Locally

produced

manufacturing.
Location:

(Near Market).

limestone

for

cement

3.Example of contemporary firms primarily having either raw material or market
locations.

Market
Orientation
Perishable

Bulk
yyy

Beer and Soft
drink Bottling

Automobile
assembly,
Furniture
Lumber, Pulp,
Mills,
Plywood,
Veneer
Bulk
y

Weight
Gain

Baking

Copper, Rice
and Sugar
beets
Canning and
Freezing

Perishable
Raw
Material
Orientation

Weight
Gain

4.5

WALTER CHRISTALLER’S CENTRAL PLACE THEORY

1. INTRODUCTION:
Walter Christaller in 1933 developed his ‘central place theory’ based on observations
concerning settlement patterns and functions in Bavaria, with a view to discovering
order in the spacing of population clusters and settlements in the landscape. It is assumed
that since there is a degree of order in the relationship between size and ranking of
settlements in any region, there may also be some logic in the distribution or spacing of
settlements of different sizes and functional importance.
However, this theory does not apply to any manufacturing economic activity. To quote
Hartshorne and Alexander (economic geography) ,
“ This theory does not apply to manufacturing or other specialized activity,
but to those functions that occur in central places in response to the needs of the
hinterland market, such as retail goods, banking, and professional services… these
activities occur in town of various sizes due to the size of the market or trade area
covered.”
2. ASSUMPTIONS :
A. EXPLICIT :
1. Isotropic(even)surface.
2. An economy based on providing goods and services to the surrounding population
and not on the production of primary or secondary products.
3. Even distribution of population on the isotropic plane.
4. Equal ease and opportunity of movement in all directions.
5. Single means of transport and transport costs being directly proportional to distance.
6. Location of service center in the centre of the area served.
7. Visit of nearest Central Place by consumers to minimise travel distance. (i.e, principle
of least effort).
8. Same income and demand for goods/services.
9. Economic men : suppliers try to maximise their profits by locating in the place
where its possible to cover maximum possible area of consumers.
10. Central place is not necessarily central in geometric sense.

11. Central places are points of settlement.
B. IMPLICIT.
1.

Dependence of the population size on the goods/services offered.

2. Offering of all goods & services of the lower order center by the higher order central
place.
3. Operating of a minimum number of central places in a systems.
4. Existence of complete information and perfect competition.
5. “Closed Systems” nature of central place hierarchy because each center serves only
its immediate hinterlands. It does not interact with any outside regions like national
or international regions.
6. It is deductive and deterministic, since it deduces conclusions and fixes the place of a
centre and its function.
7. Central place’s existence as a dimension less point.
8. Serving of hinterland by a central place but non-serving itself or its own needs!
9. Higher order goods have longer ranges.
3. IMPORTANT CONCEPTS :Concepts like “Range of a good”, “Threshold”, “Desire lines” , “Order” , “economic
reach” help us understand Christallen’s Central place theory.
4.

WORKING OF CENTRAL PLACE HIERARCHY.
LEVEL OF CENTRE

Types of goods and services
SHOPPERS

Metropolitan Centre
Regional City
City
Town
Village
Hamlet

X

CONVENIENCE
X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X = A Centre of the specified level provides goods and services of this order.
Each higher order centre provides services of lower order centres, too.

5.

EXAMPLES OF FUNCTIONS IN CENTRAL PLACES OF VARYING
SIZES.

1.

HAMLET :
Grocery, Church,gasoline service station.

2. VILLAGE :
Barber shop, Bank.
3. TOWN:
Furniture store, Clothing store.
4. CITY:
Shoe store, Jewellery store, Florist, Hospital.
REGIONAL CITY :
Administrate Government functions.
METROPOLITIAN :
International Banking, Finance.

6.

PRINCIPLE OF CHRISTALLER’S THEORY :-

Christaller chose the hexagon as the ideal trade area shape because it closely
approximates the qualities of a circle (all areas on boundary are equal distance from the
centre) and avoids the problem of underlap or overlap as shown below :He was of the view that the Hexagon would be a more efficient shapes to include all the
surrounding regions/space in one unique trade area and to avoid the problem for each size
of community of overlap or underlap. So trade areas for each size of community
appear as hexagons instead of circles.

THE THEORITICAL BASIS OF CHRISTALLER’S CENTRAL.PLACE NETWORK :-

A. First , populations to settle in the region would be agricultural. Families would
tend to settle in groups and small, largely self sufficient hamlets would be
established in the landscape. However, to buy, sell or exchange goods people
have to travel to the nearest trading centre or hamlets (villages) and villagers in
turn have to look up to higher order towns for higher order goods and services.
B. There are 3 ways of developing this hexagonal network :a. Market Principle

(K=3)

b. Traffic Principle

(K=4)

c. Administrative Principle ( K = 7 )
Here K means the number of areas served by a Central place including its own, i.e.,
K = 3 means Central place + two other equivalent central places.
K = 4 means Central place + 3 other equivalent central places.
K = 7 means Central place + 6 other equivalent central places.
Here equivalent central places means the consumer populations of the central places.
C. (I) Market Principle ( K = 3 ).
Here , the routes which link the higher order center do not pass through the lower order
centres. Consumers divide into 3 equal groups when shopping in the 3 nearest largest

places. Three largest nearest places , because they can approach only 3 largest centres
equal in importance and equidistant. Each of this lower order consumer group is located
on the each points of hexagon. This would minimise travelling to the next higher order
central place.
Each higher central place has six surrounding points .1/3 rds populations of each these
points can be taken to visit it. So, 1/3rd of populations from 6 points is equal to 1/3*6=2
Full populations or 2 equal size places.

Thus, it serves the populations equal to

populations of 2 such places plus its own, i.e ,1+2 = 3 central places.
Thus each higher order serves 3 centres including itself and dominates two centres (lower
order). This chain continues down. There exists only one highest order central and the
number of centres at every level below it increases by a factor of 3.
This K = 3 network would develop where the lower order settlements had to be as near
as possible to the higher order central places.
A central Place Systems Organized according to Christaller’s
Marketing Principle.
Level of Hierarchy

Equivalent Number of

Equivalent Number of

Central Places dominated by

Market areas dominated

the highest order central

by the highest order central

place

place

Metropolis

1

1

City

2

3

Town

6

9

Village

18

27

Hamlet

54

81

ii. TRAFFIC PRINCIPLE (K = 4)
In marketing principle, the routes linking highest order centers do not pass through lower
order centers, thereby leading to inefficient transportation Network. In traffic principle,
central places are so located that lower order centers lie along the straight line paths
between higher order centres.

Here, smaller lower order
places divide into two equal
parts, that is ½ when
shopping in the 2 nearest
larger cenral places.

Each higher order serves a population equivalent to population of 3 similar size
central places. For example ½*6 (points) = 3.

Thus, it dominates 3 lower order centres and serves 4 similar size centres including its
own self. This chain continues down the hierarchy.

A central place system organised according to Christaller’s is
Transport Principle:
Level of Hierarchy

Equivalent Number of

Equivalent Number of

Central Places dominated by

Market areas dominated

the highest order central

by the highest order central

place

place

Metropolis

1

1

City

3

4

Town

12

16

Village

48

64

Hamlet

192

256

Here, in this principle , the number of settlements are maximised along the straight lines
to facilitate efficient transportation.

This hierarchy would develop in regions where transport costs are more important,
because it maximises the number of central places on straight line routes.

III.

ADMINISTRATIVE PRINCIPLE ( K = 7 )

In this case, the whole market area of the each lower order centre is included in the
region. Population has no choice to visit nearest centres and hence no chance of
population getting divided amongst various nearest higher order centres. This is done to
achieve political and administrative goals. For example, district collector has to collect
tax from the whole population of the area .Populations of the area can’t be permitted to
pay some tax to collector of their area and some to collector of other area , because it
causes inefficiencies besides law & order problems.

Here, all places A, B, C, D, E and F
are controlled fully by central place
G.

The Central place G dominates 6 other places and serves population of 7 places including
its own. K = 7 Network would develop in highly developed systems of central
administration, because the resultant arrangement maximises the number of settlements
dependent on any one central place and eliminates the shared allegiances of other K value
system
A central place system organised according to christaller’s Administrative principle:
Level of Hierarchy

Equivalent Number of Central

Equivalent Number of Market

Places dominated by the highest

areas dominated by the highest

order c entral place

order centre

Metropolis

1

1

City

6

7

Town

42

49

Village

294

343

Hamlet

2058

2401

CRITICISM:
i.

NEGATIVE :

a. Assumptions of isotropic surface and rational human beings are wrong.
b. Settlements are not even spaced.
c. Non existence of equal sized equidistant spheres of influence or central places.
d. Sometimes, lower order centres have functions of higher order central places.
e. Consumers need not necessarily act in a rational way.
f. Hierarchical tier functioning is not strictly followed. Higher order central places have
snatched some of the functions of a lower order place.
g. Market forces need not always operate central place systems because governments
too interfere.
h. It is more applicable to regions emerging from a subsistence economy having
clear distinction between town & country but not to economically advanced regions.
Where it is distorted by factors like industrial concentrations and government policies
for regional development.
1. Fixed K value shows a very poor approximation with reality.
ii.
a.

POSITIVE :
Selective locations and efficient division of space and functions find a rational

basis.
b. It shows interdependence by way of functional and behavioral aspects.
c. It helps find some order in the spacing of settlements.
d. Settlement distributions may be uneven but not disorderly.
e. Central function may be found in socio-economic political structures like temple, etc.
f. It helps understand role of settlement as a place of trade and exchange.
g. The model has been used for regional planning as in Germany.
h. Its validity is proved by examples like settlement pattern in Northern china plain.
i. It helps understand play of concepts like range of good, etc.
CONCLUSION:
To Conclude in the words of Sidhhartha & Mukherjee

(Cities,

Urbanisation, & Urban Systems) “Despite all the criticism it must be

emphasized that as with most other social sciences theories the central place theory
is not meant to have universal validity.”
10. CENTRAL PLACE SYSTEM IN INDIA :A.

India has administrative and demographical hierarchy.

It has K = 6 level

administrative hierarchy as follows.:
1.

National Capital

2.

State Capital

3.

District Headquarters

4.

Tehsil towns

5.

Block Development Centres

6.

Gram Panchayat Centres

Ratio of Districts to States
Ratio of Gram Panchayats to Blocks
Ratio of Tehsils to District

Metropolitan Cities
Urban Centres
5000 population
Most-Non Urban
1 : 19
1 : 40
1: 6

Theoretical spacing lower & higher order =

2:6

Practical spacing =

2:6

B.

The Census has on its own identified various settlements level without applying

any logical of scientific method. Still ,Indian settlements have a close resemblance to the
marketing principle of the theoretical central place systems.
Spacing Theoretical (Marketing principle) high to immediate low order centre = 1: 1:72
Spacing practical actual (Marketing principle) high to intermediate low order centre =
1:1.41 to 1:1.83
Major exceptions relate to million cities.

To quote Siddharth and Mukherjee ,
“It cannot be conclusively proved that central place systems apply to Indian
conditions …. It cannot be rejected as well.”

5. RESOURCES
5.1 INTRODUCTION:
What do we exactly mean by the term “resources” ? “Resources” in common
person’s parlance means anything available on this earth like Coal, plants, etc.
However, a mare presence of these things does not make them a resource from the
point of view of geography. A a thing becomes a resource only when it is actually
of some use to human beings.
To quote E.W. Zimmermann ,
“ The word resources does not refer to a thing or a substance but to a
function which a thing or a substance may perform or to an operation in
which it may take part, namely, the function or operation of attaining a given
end such as satisfying a want. In other words, the word resource is an
abstraction reflecting human appraisal and relating to a function or
operation.”
A thing is converted into a resource only if it satisfies human wants which may be
of any nature ,i.e., personal or social. To quote Prithwish Roy,
“Only the satisfaction of human beings converts anything or a substance into
resource.”
1.

In short, a resource must posses following attributes :
i.

functionability

ii.

Utility

For example, plants do have functionability. But, if they can’t be utilised to satisfy
human wants, they can’t be termed resources. Conversion of a thing into a
resource depends on many factors like :
1.

Human desires/wants

2.

Level of cultural development. For example, petroleum is existing in
Arabian countries for a long time. Yet, it could not become a resource
until and unless modern technology could be applied to these areas to
extract petroleum. Once extracted to satisfy human wants, it became a
resource.

2.

A Resource can be viewed from different perspectives :
i.

Temporal Perspective : Past, Present, future/potential

ii.

Geographical

Perspective:

Lithospheric,

atmospheric,

Hydrospheric, biospheric, extra terrestrial, Geo-centric.
iii.

Quantitative Perspective: Sufficient, Insufficient or less/more

iv.

Qualitative Perspective: Objective(external), subjective (internal)

All resources broadly fall into above categories. For example, biospheric
resources contain plant, human and animal kingdom resources. Human
resources include man’s own wisdom ,too . To quote E.W.
Zimmermann,
“man’s own wisdom is his premier resource - the key resource that
unlocks the universe.”
4.

Changing perspective :
a)

Old concept : Prior to industrial revolution (1760), a resource
meant a tangible thing, only natural things, only the quantity of
things, static nature of things. It excluded intangible things like
peace, human population, concept of resistance by things.

b)

New concept : It includes intangible things, human population,
concept of resistance of things, dynamism of things. It excludes
things full of resistance and no functionability.

3.

NORMAL CLASSIFICATION :
However , a geographer generally classifies a resource into 2 broad
categories :
a) Natural
b) Human

A)

NATURAL : Examples are petroleum, iron, copper, etc.

B)

HUMAN : Health conditions, culture, technological level etc.

4.

Following are some of the important definitions in the field of Resources
geography.
1.

E.W. ZIMMERMANN,
“Resources were defined as means of attaining given end, i.e.,
individual wants and social objectives. Means take their
meaning from the ends they serve. As ends change means must
change also.”

CONVERSION OF A THING INTO RESOURCE
CULTURE
Substances

Resources

Natural Human

Overcoming
Of Resistance

Conversion of
Neutral Stuff

Introduction of
Utility

INTERRELATION OF NATURE, HUMAN BEINGS AND CULTURE

NATURE

NATURE

NATURE

Human beings are both a producer and consumer

2.

Wesley C. Mitchell,
“Incomparably, greatest among human resources is
knowledge.”

3.

Hamilton, “It is technology which gives value to the neutral
stuffs which it processes; and as the useful arts advance the
gifts of nature are remade. With technology on the march, the
emphasis of value shifts from the natural to the processed
good.”

4.

Bowman, “The moment we give them (resources) human
association they are as changeful as humanity itself.”

5.

Prithwish Roy, “So, with the

efforts of man, through the

functional or operational process, resource is dynamically
created.”
6.

Professor Harbison,“Human resources are the energies, skills,
talent and knowledge of people which potentially can and
should be applied to the production of goods and services.”

7.

A.k. Dutta Gupta, “Human resources refer not to human
beings as such, but to the qualities they posses and which can
be used by the community for some useful purpose.”

8.

E.W.Zimmermann, “Man (read it as human being) is
predestined to be the director, planner and adviser.”

5.

COMPARISON BETWEEN WEALTH AND RESOURCES :
Wealth consists of :
i.

Utility

ii.

Functionability

iii.

Scarcity

iv.

Transferability

Resources consist of only :

7.

i.

Utility

ii.

Functionability

COMPARISON

BETWEEN RESOURCES AND NEUTRAL

STUFF:
Anything or any process that restricts substance becoming resource is
called neutral stuff. Also, alternatively, if anything or substance does not
contain functionability or utility, it is termed neutral stuff. Whereas, a
resource contains both functionability and utility.

5.2 NATURAL RESOURCES
1.

CHARACTERISTICS OF NATURAL RESOURCES:
A)

AVAILABILITY :
They are available both spatially and temporally. Both horizontally and
vertically. However , availability may be affected adversely in case of
non-replenishable resources, whether biotic or abiotic, i.e., land his
become a 3 dimensional resource since the industrial revolution. These
resources may be terrestrial or extra-terrestrial.

B)

DISTRIBUTION :
Highly uneven distribution.

C)

OCCURRENCE :

1. UBIQUITOUS : Available everywhere, i.e., land, etc.
2. LOCALISED : Restricted to some places only. Two types are:
1.Commonalities – found commonly variedly, i.e., Water bodies.
2.Rarities – Found rarely/scarcely in some places only , i.e. , gold, silver,
etc.
D)

TYPES
a. FUND RESOURCES :
These resources will not last forever if used indiscriminately, i.e., coal,
etc. They may be renewable or non-renewable, i.e., Iron Ore (nonrenewable), pig iron (renewable) since scrap can be recycled from pig
iron once more.
b. FLOW RESOURCES :
These resources will last forever , i.e. , water, wind etc. These may be :
1.Finite
2.Infinite.
Infinite resources may be turned into a finite one through
indiscriminate use, i.e., forest resources are a self generating and
renewing resources but dense forests may become barren infertile
wastelands due to indiscriminate felling. E.W. Zimmermann has
termed such resources as silt ed or choked flow resources.

B. DYNAMISM :
Natural resources are dynamic, since nature is dynamic. To quote Prithwish Roy,
“In the eye of a natural scientist nature may be constant but a social scientist
is concerned with the meaning of nature for man – dynamic nature known
to man for his own existence.”
This nature is both expanding and contracting. As the concept of Phantom Pile
(E.W. Zimmerman) shows, application of science and technology produce/expand
the extra resources from a given substance, i.e. ,fuel efficiency increased recently
(1990 s) leading to plying 8o km per litre compared to 30 km per litre in 1980 s!
To quote E.W. Zimmerman,

“ It (Nature) expands in response to increase in knowledge and improvement
of the arts.Nature reveals herself gradually to man, but no faster than he
can learn”.
C. IMPORTANCE :
i.

Natural resources are quite important to human beings in terms of their
forming the basic bedrock upon which the whole edifice of economic
development is constructed. Availability of natural resources gives to a
place the initial advantages on which to build on.

ii.

Presence or absence of natural resources may have both positive and
negative effects. For example, natural resources of Africa, North America,
South America and Australia led to their exploitation by European nations,
which were highly advanced in terms of human resources. It created
positive gains to European nations. But, it led to negative consequences of
the still lingering economic backwardness of African countries due to
enslaving of 30 millions of their productive human population during
slave era and their transportation to newly found lands. African countries
have still not recovered from those losses of human beings.

iii.

Natural Resources remain meaningless, if there are no corresponding
human resources/cultural advances capable of exploiting these. Despite
being located in equally the same geographical locations (equatorial dense
forests), Malaysian Rubber Plantations have a semblance of development
with all the benefits/fruits of modern economic development, whereas
pygmies are still economically backward and subsisting on nature for their
bare survival with no benefits of modern civilisation owing basically to
superior and efficient human resources/culture/science technology of the
former

in

sharp

contrast

to

primitive

resources/culture/science/technology of the later.

levels

of

human

5.3

SIGNIFICANCE OF NATURAL AND HUMAN
RESOURCES IN ECONOMIC DEVELOPMENT

1.

INTRODUCTION :
What do we exactly mean by the terms ‘Significance’, ’Natural’, ‘Human’,
‘Economic Development’ ? Once we understand these terms, we are in a firm
position to appreciate the significance of Natural and Human resources in
economic development.
A.

SIGNIFICANCE : This words means “Importance” or the “Prime
role”, or “Main role”.

B.

NATURAL :

This word means all those things which are made

available to human beings by nature. These are freely available to
huma n beings. Human beings have not created these things. For example,
Sunshine, Wind, etc.
C.

HUMAN : This word means all those thing which are related to human
beings and those that are created through human efforts and their
interrelationships. For example, culture, ethics, arts, science and
technology, etc.

D.

ECONOMIC DEVELOPMENT : ‘Development’ means growth of a
thing from infancy stage into maturity stage. Economic Development
means development from the point of view of economics. “Economics”
means activities of producing, exchanging and consuming goods/services
and information. Therefore, the phrase “Economic Development” may be
taken to mean development of activities related to production,
exchange and consumption of goods, services and information in a
spatio-temporal context.

2.

SIGNIFICANCE

OF

NATURAL

AND

HUMAN

RESOURCES

IN

ECONOMIC DEVELOPMENT :
A.

Economic development of any place, region, or nation depends on the
natural and human resources available to it. Quantitative and Qualitative
aspects of resources are very important. Natural and human resources are
unevenly distributed. Small countries like Kuwait have disproportionately
large natural resources compared to big countries like India, i.e. ,Kuwait
has 500 times more quantity of petroleum than India. Similarly some
spaces may posses higher human resources, i.e. ,places in West Bengal
and Bangladesh have a density of population more than 600 persons per
sq. km ,whereas Himalayan regions posses population of less than 30
persons per sq. km. Therefore, Bengal and Bangladesh are more
developed economically than the Himalayan region.

B.

Although natural resources give to a place, region, or space the initial
advantage, yet its human resources which are more important of the two.
To quote E.W. ZIMMERMANN, “ Man is predestined to be the
director, planner and aspirer” . Also, “As an agent of Production man
contributes his labour, mental and physical; with the aid, advice and
consent of nature he

builds culture to render more effective his

production and to lessen the impact of resistance ; he discovers new
ways and invents new arts; his

aspiration ,aim and purpose. As

beneficiary, he enjoys the advantages of advancing civilisation.”
C.

MAN LAND RATIO :
A mere presence of a large/small number of human population is no
guarantor of economic development in all geographical area. Similarly, a
large/small population of human beings may mean less economic
development. It looks contradictory, does it not ? Its really not so, what
matters is not the presence or absence of a large population of human
beings rather its the man - land ratio which is more important. This is
indicated by the following equation:

Man-Land Ratio = Efficiency of man (Humans)
Efficiency of Land
Efficiency of humans depends on their cultural, scientific, and
technological levels, which can be measured in terms of their productivity
from land per person especially in agrarian areas.
Sparsely populated areas may be under-developed and densely populated
areas may be highly developed in all respects. To quote E.W.
Zimmermann,
“ Man-Land Ratio takes into account all the human qualities bearing
on productivity and all the environmental aspects both natural and
cultural affecting the availability of resources.

A high population

density may indicate overpopulation; but even a region with a low
population density may be over populated ,if we consider its man Land Ratio.”
For example, European Countries like Holland ,etc., have a higher
population density compared to India . Still , Holland has higher economic
development due to higher man – land ratio due to higher efficiency of
man compared to India. In other words, Holland has qualitatively better
efficient human resources in terms of health, knowledge, capabilities,
activities, productivity. On the other hand, Indian human resources are
poor qualitywise that hampers economic development.
D.

SIGNIFICANCE OF NATURAL AND HUMAN RESOURCES IN
ECONOMIC DEVELOPMENT:
To quote E.W. Zimmermann, “Carrying capacity is the capacity to
support human life to satisfy human wants.”

It is both internal (geographical ) and external (cultivated culturally). For
example, though Hongkong possesses low internal carrying capacity, still due to
external capacity (like hard labour, science/technology) it has had tremendous
economic development.

Thus, human efficiency, cultural level in Juxtaposition with natural resources
determine economic development. A lot many examples are available to prove
this point. Jharkhand state in India possesses one of the richest mineral resources
basis. Still, it is not economically developed simply because of poor quality of
human resources. It has a tribal population, which does not presently posses
requisite skills, knowledge and willingness to make optimum use of those natural
resources like coal ,etc. Consequently, skilled and qualified technical and other
types of labour from outside the state gets employed which naturally means:
1. No benefit of employment to locals.
2. Outflow of salaries/economic benefits to outside areas to which such
imported labour belongs.

Naturally,

Jharkhandites

have

low

purchasing power which affects their ability to enjoy basic needs like
proper food, clothing, shelter and other luxuries.
A.

Spatial Examples of human – Natural resources’ significance abound. People like
Pygimes, Bushman, and other tribal groups still engage on a subsistence level in
hunting,

fishing and gathering. Also, modern and advanced American and

European people engage in these activities. But, Pygmies/Bushmen are
economically less developed, because their economic activities are carried out on
subsistence level, merely enough to satisfy their own basic needs, leaving little to
spare for higher economic activities like exchange, etc. simply because of their
low man-land ratio in terms of their primitive level of science and technology. In
sharp contrast, Europeans/Americans carry out hunting, fishing, gathering on a
commercial basis with the help of their higher levels of science and technology
reflected in their use of modern means of fishing, forestry, agriculture, i.e., in
1995 the total fish catch was 90 millions tons in the world. Grand Bank, and
Dogger Bank are the famous fishing grounds. Atlantic and Pacific Oceans supply
80 % of the catch. This is so because temperate fisherman are skilled, possess
traditional technical skills and higher technology like high-tech processing,
salting, packaging and exporting. Naturally, they have much to spare for market
besides fulfilling their own needs. This gets them enough money in
domestic/international markets which is further used to speed up their economic

development in terms of better health, education, living conditions, recreational
facilities, higher national income, lower fertility and mortality , etc.
B.

Temporal examples: Earlier human civilisations developed around rivers
possessing areas endowed with fertile land like Indus valley, Mesopotamia,
Egypt, Mediterranean and China simply because of superb natural and human
resources, whereas areas like interior of Africa and Asia remained undeveloped.

5.4

Formula of Sustainable Economic Development :

Degeneration of resources(dr) = Regeneration of resources(rr)
Or dr = rr

--------(i)

Now, rr = Discovery of new sources of particular resource(N), Discovery of more
efficient way of utilisation of present resources(E), working out alternative
substitute resource(W)
Or rr = (N,E,W)

--------(ii)

From (i) & (ii) we get
dr = (N,E,W)
1.

Concepts of short term and long term highest possible
sustainable development :
Y
SDPH1 = Short term equilibrium
curve of economic development

5
Consumption of
Resources

4

SDPH2 = Long term equilibrium
curve of economic development

A

3
2

SD
PH2

B

1

A
B

0

1

2

3

4

SD1
PH1

5

Levels of Sustainable Development

EXPLANATION :

X

1.

In the short run, maximum possible sustainable development level is at 5
on (X –axis), since resources are not fully utilised yet as in Primitive tribal
societies. However, with progressive advance of civilisation, resources
are used increasingly, leading to a situation where a given

level of

development is found unsustainable in view of increasing utilisation/rapid
depletion/non-availability of resources. Hence, the point of SDPH, shifts
from B to A.
2.

However, since human beings desire not to loose what is gained through
development processes already, it leads to an acceptance of the decline of
the known resources. At the same time , there is worry that they may
actually lose this development state , if not sustained adequately. This in
turn leads to a search for NEW. In due course of time, NEW is acquired.
Thus, now more resources are available to sustain the development.
However, since rate of depletion of resources shifts to a higher level, the
curve of sustainable development shifts to the higher side too as SDPH2.
Curiously enough, having learnt from the pitfalls of short-term run of
development, mankind becomes wiser in the new situation and therefore
makes more efficient and in a much efficient way

the use of NEW

resources, thereby prolonging the life of resources. This leads to the point
of maximum possible sustainable development shifting from ‘A’ to ‘B’!
2.

Formula for depletion or resource availability on particular given point of
time in future :
1.

Total depletion = Present Depletion (1+rate of depletion) time
-----------------100

in future.
2.

Resource Availability = OR – Total depletion.
Where

OR

=

total

reserves

of

exploitable

resources.

5.5 AN INTRODUCTION TO THE INTERESTING ELEMENTS OF IN THE
STUDY OF “RESOURCES GEOGRAPHY”
1.

INTRODUCTION :
“OPTIONS GEOGRAPHY” or the “RESOURCES GEOGRAPHY”
becomes an interesting field of study by applying certain basic principles
of economics as illustrated below:

2.

LAW/CONCEPTS :

1.

LAW OF CONSERVATION AND DEPLETION OF RESOURCES :

Y

D

10
6

5
4
2
1
X
0

C1

C2

C3

C4

C5

C6

C7

(Ideal Long run equilibrium of the conservation and depletion of resources)

C

=

Conservation of resources

D

=

Depletion of resources

C1

=

Lower level of consumption of resources (C3=Level of consumption)

C4

=

Higher level of consumption of resources.

X

=

Axis showing number of units.

S

=

Point of intersection or the point of sustainable development.

(A)

1.

Above figure clearly shows that in the short run, when consumption of

resources is at lower level C1, the conservation of resources is very high at level 6 on Y
axis and depletion is low at level 1 on Y axis.
2.

At consumption level C3, conservation is still higher at 5 than depletion at 2 on Y
axis.

3.

At consumption level C4, both conservation and depletion level are same at 4 on
Y axis.

4.

At consumption level C7, depletion at 10 is higher than conservation at 1 on Y
axis.

(B)

However, C & D curves tend to exhibit equilibrium in the long run ,because
though in short run initially resources consumed are less leading to a higher level
of conservation than depletion, yet after some time human advancement,
needs/desires lead to a situation where resources consumption assumes alarmingly
higher proportion leading to higher depletion than the known level of
conservation of resources. Consequently, humanbeings realise the folly and start
consuming less of those resources which ultimately leads to a situation where
depletion of comes back to the relative position of the conservation level.

(C)

No doubt, at one point depletion becomes more than conservation. Naturally,
question arises as to how can than resources lost brought back so that C equals D/
It looks a fallacy, does it not ? Well, No! Here, resources mean all the resources
taken together that are available to humanbeings. Whenever, any one resource
depletes more than its conservation from amongst the basket of resources,
humanbeings are quick enough to compensate it either by developing viable
alternatives or efficient exploitation techniques. Application of efficient
techniques prolong the life of remaining resource amount, thereby raising its
relative level of conservation. Thus, mankind always achieves a balance between
C & D of resources, i.e., point S where development vs a vs conservation (or
sustainable development) issue gets resolved amicably.

(D)

THEORY :
1.

The analysis of D & C illustrates clearly how automatic

mechanism

solves the 3 problems of what, how and for whom, i.e., what resources to
be used or created, how to be consumed or how to bring down depletion
level, and for whom to do all this.
2.

The conservation schedule :
A conservation schedule illustrates the relationship between the quantity
conserved and the consumption of commodity, other things being held
constant. Such a conservation schedule, depicted graphically by a C curve,
holds constant other things like destruction by natural causes like fire, etc.
Almost all resources obey the law of downward sloping conservation,
which holds that conservation falls as the consumption of resource rises.
This law is represented by a downward sloping conservation curve.
Many influences lie behind the conservation schedule for this
automatic mechanism as a whole: human desires , needs ,natural
hazards, etc. When these influences alter, the conservation curve will
shift.

3.

The Depletion Schedule:
The depletion schedule (or depletion curve ) shows the relationship
between the quantity of a resources that humanbeings desire to
deplete- other things constant – and that resource’s consumption .
Quantity depleted generally responds positively to consumption ,
so the depletion curve rises upward and to the right.

Elements other than the resource’s consumption affects its depletion ,too.
The most important influence is

the resource’s total availability ,its

known/unknown reserves and the ability of human beings to innovate and
evolve efficient technology to utilise the same for a still further longer
period . Other element in depletion include natural disasters beyond the
control of human beings.

All resources obey this law of upward sloping depletion which holds that a
quantity depleted increases as a resource’s consumption rises . This law is
represented by an upward sloping depletion curve.
4.

Equilibrium of Conservation and Depletion:
The equilibrium of conservation and depletion of resources is achieved in
a geographical setting at a consumption level at which the forces of
conservation and depletion balance each other. The equilibrium
consumption is the consumption at which the quantity of a resources
conserved just equals the quantity depleted. Graphically ,one can find the
equilibrium as the intersection of the depletion and conservation curves.
At a consumption level above the equilibrium, human beings are
confronted with more depletion of resources than they can withstand,
which leads to a shortage of resources & exerts downwards pressure on
consumption of resources .Likewise, a low consumption level of resources
leads to an excess of resources and human beings therefore are led to
consume more and more of them, thereby leading the consumption
upward to the equilibrium.

5)

Shifts in the Depletion & Conservation curves alter the equilibrium
consumption and quantity of resources . An increase in conservation,
which shifts the conservation to the right shall increase both
equilibrium consumption and quantity of resources. An increase in
depletion , which shifts the depletion curves to the right shall decrease
consumption and increase the quantity conserved.

6)

To use conservation and depletion analysis correctly, we must follow
these steps :-

i)

Distinguish a change in conservation or depletion (which produces a shift in the
curve ) from a change in the quantity conserved or depleted ( which represents a
curve movement along a curve ).

ii)

Keep other factors constant, which necessitates distinguishing the effects of a
change in the resource’s consumption from the effect of a change in the other
influences.

iii)

Look always for the conservation and depletion equilibrium, which is at the point
where forces acting on consumption and quantity of resources are in balance.
7) Competitively, consumption levels determine the extent of depletion among
those resources in need of conservation.

2)

CONSUMPTION ELASTICITY OF CONSERVATION :
A measure of the extent to which quantity conserved responds to a consumption
change. The elasticity coefficient (consumption elasticity of conservation Ecp ) is
percentage change in quantity conserved divided by percentage change in
consumption. In figuring out percentages, we must use the averages of old and
new quantities in the numerator and of old and new consumption levels in the
dominator disregarding the minus sign.

3)

CONSUMPTION ELASTICITY OF DEPLETION:
Conceptually similar to consumption elasticity of conservation except that it
measures the depletion responsiveness to a consumption change. More precisely,
the consumption elasticity of depletion measures the percentage change in
quantity depleted divided by the percentage change in consumption.

4.

CONSUMPTION-

INELASTIC

CONSERVATION

(OR

INELASTIC

CONSERVATION ):

The situation in which consumption elasticity of conservation is below 1 in
absolute value. In this case, when consumption declines, total resource loss
declines, and when consumption is increased , total resources loss goes up.
Perfectly inelastic conservation means that there is no change at all in quantity
conserved when consumption goes up or down.
5.

CONSUMPTION ELASTIC CONSERVATION :
The situation in which consumption elasticity of conservation exceeds 1 in
absolute value. This signifies that the percentage change in quantity conserved is
greater than the percentage change in consumption. In addition, elastic
consumption implies that the total resource gain (Consumption times quantity )
rises when consumption falls , because the increase in quantity conserved is so
large.

6.

UNIT ELASTIC CONSERVATION :
The situation, , between consumption-elastic conservation and consumption
inelastic conservation, in which consumption elasticity is just equal to 1 in
absolute value.

A)

LAW OF DIMINISHING AVAILABILITY OF RESOURCES :-

Y

Availability
4
3
2
1
X
0

1

2

3

4

Consumption
As more and more Quantities of a resource are consumed ,its total availability
declines.
B)

LAW OF DIMINISHING CONSERVATION OF RESOURCES :
A law stating that the additional conservation from successive increases of
technological efficiency will eventually diminish when other efficiencies are held
constant.

NOTE:

I LEAVE IT TO THE ERUDITE
OUTLINED LAWS.

LEARNED READERS TO APPLY

PRACTICALLY

THE ABOVE

6.

FACTORS OF PRODUCITON

6.1 INTRODUCTION :
Factors which are necessary for production of goods, services and
information are called factors of production. Production may be of several
types : ( a) Primary, (b) Secondary,( c) Tertiary, (d) Quaternary, (e) Quinary.
Production of products, i.e., goods, services and information can not take place
from out of nothing. For example, in primary sector, agriculture generally is
followed. Agriculture involves many activities like tilling the land, sowing the
seeds, irrigating the land, and harvesting the crops. But, if there is no place or
piece of land to cultivate, crops can’t be grown. Similarly, if there are no people
to do the tilling, sowing, and harvesting of crops, again crops can’t be grown.
Likewise, seeds can’t be sown, if the farmer does not have money to buy them.
fertilisers to increase the productivity of soil, if the
farmer does not have enough money to do so. Without technical knowledge, the
farmer can’t apply scientific techniques to farming. Thus, we see that a large
number of factors determine the growing of a crop. Same applies to production of
products in other fields, too. All factors work in an integrated manner and not
in isolation.
6.2 FACTORS OF PRODUCTION :
Following are the main factors of production :
a) Land,(b) Labour, (c) Capital,( d) Technical knowledge,(e)Entrepreneurship,(f)
Organisation, (g) Time, (h) Government policy, (I) Power Resources, (j)
Power Resources, (k) Historical factors, (l) Opportunity cost, (m) Oceans, sky
and space.
1.

EXPLANATION:

a)

LAND:
Availability and configuration of land besides its quality influences
production. Land includes topographical features like relief, texture and
structure of soil, productivity of soil, minerals ores, plant and animal
kingdom on it, etc. Financially cheap land attracts people to start some
economic activity there. High costs of land discourages people from

taking up economic activities there , in general. However, in cities, cost of
land determines the type of activities taken up, i.e. , central part of
metropolitans being costly is used for higher economic activities like Big
Shopping Centres ,whereas outer fringe areas, being relatively cheaper are
used for residential areas. Fertile land easily attracts farming activity of
crops ,whereas a barren land does not. But, a barren land may attract other
production activities like manufacturing which does not require land to be
fertile. Thus, in short land acts as an important factor of production.
b)

LABOUR :
Quantity and quality of labour help determine the type of production and
location of

production units. Without labour ,no production can take

place. Labour can be of several types: Skilled, Semi skilled or Unskilled.
Production activities requiring higher levels of skills/knowledge like
information technology are generally located in and around big cities due
to easy availability of the same. Production activities not requiring skilled
labour can do with unskilled labour. Shortage or excess of requisite
labour affects production ,too. A region lacking in requisite kind of
labour may not be able to take up a particular kind of production activity
or it may have to borrow the same from somewhere like Gulf Countries
are importing from outside the skilled / technical labour to help carry out
the production of petroleum, on a commercial basis. Labour may be
mobile or immobile. Mobility of Labour depends upon, using Everett S.
Lee’s Migration theory, on 4 factors: source, destination, intervening
opportunity and individual’s own perception besides sequential
decisions. Labour intensive production activities generally prefer a
location near labour itself to cut down on labour costs. Thus, Labour
influences in several ways the production.

c)

CAPITAL:
Without Capital, production can’t take place. Capital includes both money
as well as machinery. It may be:- mobile or immobile. Mobility is

determined by the probable distribution of returns. Known customers have
a fair chance of getting more finance from the financial institutes like
Banks, etc.

Mobility determines industrial location in free & open

economies. On the other hand, mobility does not determine industrial
locations in Socialistic Countries, because there it is highly mobile. It is
not highly mobile in capitalistic societies. Production may or may not be
capital intensive. Industrial development of a nation state or any region
depends on building of core industries requiring heavy capital.

Such

capital may either be borrowed from domestic or international financial
markets.
d)

ORGANISATION:
Organisation acts as a factor of production, because without organisation
of production, the firm or productions unit can’t exploit economies of
mass production, raise funds and organize the production process. To
quote Samuelson Nordhaus “Efficient production requires specialized
machinery and factories, assembly lines, and division of labour into
many small operations” That’s why generally speaking production does
not take place in our basement rather it takes place in firms or the
organization ranging from finest individual proprietorship to the giant
multinational corporations or the state owned big corporations/Public
Sector Undertakings.

e)

ENTREPRENEURSHIP:
It is considered to be a mobile factor. Entrepreneur is required to kickstart
some kind of production. A region may have numerous entrepreneurs,
especially in a capitalist economy. Entrepreneur takes decisions regarding
location of production unit, etc.

For example, J.R.D. Tata was an

entrepreneur who took decisions to set up steel plants in private sector in
India.
f)

TECHNICAL KNOWLEDGE:
To run any production unit / process, a certain minimum amount of
technical knowledge / skill is required. Technical knowledge determines

production functions.

Techniques may very spatially or according to

purpose / specific location. For example, in Punjab the farmer can till the
land with the help of a tractor quicker than a farmer working simply with
oxen and a wooden hoe in Orissa. Medical laboratory or cliff house may
be designed for a specific purpose / location. Technical changes enhance
productivity.
g)

POWER RESOURCES :
Power is required to run production units. It may be derived either from
living or non – living kingdom .Coal comes from physical or non- – living
kingdom. Ox represents living source of power. Similarly, human labour
represent living type of power.

In olden days ,farming depended on

human / animal power. Similarly , manufacturing depended on coal.
However, presently hydel and other sources have taken the place of pride
amongst the sources of power. In fact, no activity can be carried out
without the help of power of some kind or the other.

Thus, power

resources act as An important factor of production.
h)

HISTORICAL FACTORS:
Historicity acts as a factor of production ,too. With time ,certain places
come to have socio – economic – politico – cultural significance and
become leading centers of production , exchange of goods, services,and
information. This is turn encourages production activities in the region by
virtue of established systems of financial institution, procurements
distribution system, etc.

i)

OPPORTUNITY COST :
It acts as a factor, too. It decides what type of production activity may
take place. If an entrepreneur finds that taking up an activity ‘X’ may cost
him an opportunity ‘Y’ which will result into a net financial loss, the
entrepreneur may switch over

to economic activity ‘Y’ from the

j)

OCEANS (WATER BODIES), SKY & GALACTICAL SPACE: Classical
economists considered only land as a prominent factor on the surface of which an
economic activity takes place. However, in today’s world water bodies, sky &
galactical space have become factors of production ,too. A nation with a large
indented coast line has better harbours / ports in larger numbers than a land locked
country. A country possessing oceanic coast may indulge into economic activities
suitable in such a scenario, i.e. ,India has been able to get mangnese noodles
from ocean surface owing to the availability of this factor of production called
large water bodies (Oceanic). European Nations having coastal locations have
been able to carry on fishery industry or Pisciculture owing to availability of
oceanic factor of production. Sky or atmospheric conditions become a factor, too
by encouraging or discouraging certain types of productions. Space (here it
means galactic, intergalactic) above atmosphere carrying human satellites is
important,too. Recently, it has become a factor in the sense that production of
certain minerals / items require certain conditions which are met only in outer
space, i.e., astronauts / cosmonauts have carried out experiments aboard artificial
satellites and succeded in manufacturing certain types of minerals, etc.

k)

GOVERNMENT POLICIES:
In capitalist or free economies ,market forces primarily regulate economic
activities

following

generally

the

principle

of

demand

&

supply/economics of scale etc. However, in communist or socialist
political set ups , principles like demand and supply/economies of scale
become rather irrelevent wherein governments of the day decide
production locations, types of products to be produced, and processes to
be followed for production. Whereas, in mixed economics, both private
and public sectors play a joint role in production. Thus, government
policies act as a factor of production, too.
l)

DEMAND FOR A PRODUCT:
Demand acts as a factor, too. No production of a product will take place, if
there is no demand for it irrespective of modes of production/political set
ups like capitalism/socialism or mixed economics.

m)

TIME :
To quote Samuelson Nordhaus “ Production requires not only labour
and land but also time .”
A farmer can not change his crops in midseason. Gas pipelines can’t be
built in a single day. Once built, they last for many years together.
Time may be of 2 types: (1) Short run (2) Long run
In short run, fixed factors like Capital can’t be changed. Only variable
factors like materials and labour can be changed. In long run, all factors
including fixed ones like capital can be changed or adjusted, also.
Efficient production requires time in addition to other factors , too.

6.3
1.

SPATIAL VARIATION IN THE FACTOR COST

INTRODUCTION :
First of all, let us understand what we mean by the terms "Spatial"
,"Variation" and "Factor Cost". Well ,the word "Spatial" refers to a place
or region on the earth's surface or a heavenly body. The word "Variation"
means a "Change". "Factor Cost" means the cost resulting from use of any
factor of production. These factors of production are: land, labour, capital,
Organization ,etc. Thus, the meaning of the phrase "Spatial variation in the
factor cost is "a change in the cost of a factor of production due to its
differing spatial location”.

2.

EXPLANATION :
Production of any goods, services and information is not possible without
existence of certain basic factors like land, capital etc. The cost of these factors is
not same at all places on the earth's surface or in outer space. For example, labour
cost is lower in rural areas than in the urban areas. Also, labour cost is lower in
less developed countries or regions as compared to the more developed countries.
Likewise, land is cheaper in rural areas. But, it is costly in Urban areas. Similarly,
finance is available at cheaper rates in highly developed financial nerve centres
like London, New York ,etc. But, the same is costly in rural areas. In the same

way, capital like machinery etc. is cheaper in highly industrialised countries. It is
costly in developing countries. Perishable and delicate raw materials transported
over a long distance makes the cost of raw materials very high. , a location of the
production unit near such raw materials decreases its cost of such raw materials.
The cost arising from "Organization and entrepreneurship" aspects are quite low
in industrial complexes like Maharashtra Industrial Development Corporation
(MIDC) complexes in Maharashtra. Whereas, these cost are quite high when a
production unit is set up in isolation ."Power" or "Energy" cost is lower near
sources of power and is higher at increasing distances. “Cost of Production” is
lower in industrially and economically backward areas in “Industrial Parks”.
Whereas, it is higher in units located in economically developed areas. Another
example can given that of the cost of land in the core and periphery of a city. The
cost of land is generally higher in the core compared to the periphery.
3.

CAUSES OF VARIATION:

The spatial variation in the factor cost is caused by numerous factors. These
factors are availability or non – availability of these factors at a given place,
mobility or immobility of these factors, and policies of governments. Excess
availability causes reduction in the price at which that particular factor is
available. For example, labour will be cheap if its supply is more than its demand.
Likewise, labour is costly, if its supply is less than its demand, because labour in
such a situation is in a position to bargain for a higher compensation package.
Existence of a large number of financial institutions at a place increases the
mobility of finances and capital, thereby decreasing the cost of these factors in
terms of reduced rates of interest. Likewise, governments give numerous
concessions like tax free holiday, cancess ional rates of duty, cheap infrastructural
facilities to industrial units located in economically backward areas,etc, This
reduces the overall cost of production. Governments provide these concessions to
achieve various policy decisions like development of economically backward
regions / areas.

4) SIGNIFICANCE OF SPATIAL VARIATION IN THE FACTOR COST
1) Spatial variation in factor cost has got both short term and long term
significance and implications. It may either encourage or dicourage the
exploitation of natural and human resources of a given region in terms of
attraction or repulsion of economic activities ,i.e., primary, secondary ,tertiary.
Quaternary, and Quinary.
2) Spatial variation in factor cost is very important in the location of production
units in capitalist and mixed economics. However ,it is of little significance in
centrally Controlled Command Economies like erstwhile Communist USSR.
3) A study of spatial variation in factor cost cleanly points to the fact that an
ideal location of any economics activity is the point where factor costs are
minimum possible.

7.TRANSPORTATION
7.1

INTRODUCTION:
What do we exactly mean by the term ‘ Transportation ’ ? Well, it means the
process of carrying something from one place to another or conveyance to
another place by overcoming the friction of geographical/extra terrestrial
/economic distance. It includes Cargo and Passenger. In olden days, means of
transportation and communication were the same. However, in modern days,
these 2 have become separated. Transport excludes communication. Now a days ,
the means of communication include post office, telephone, satellites, Internet,
etc. highly sophisticated scientific and technological gadgets. Days of running
messengers and birds are almost gone away except during natural calamities.For
example, Orissa state police department makes use of trained pigeons during
cyclonic devastations.

7.2

BASIC ELEMENTS OF TRANSPORTATION :
Following are the important basic components or elements of any medium of
transportation.
i.

The points of origin and destination.

ii.

The route through which transportation takes place.

iii.

The vehicle or the carriers on which the goods or passengers are
transported.

iv.

The kind or type of power/energy used in the vehicle.

7.3 DIFFERENT MEDIUMS OF TRANSPORTATION :
i.

Land

ii.

Water

iii.

Air

7.4 MEANS OF TRANSPORTATION :
i.

Men and animals as carriers and draught power respectively.

ii.

Road transport

iii.

Rail transport

iv.

Ropeways

v.

Cableways

vi.

Pipelines

vii.

Water ways : ( a)Internal, (b) Oceanic

viii.

Air Transport.

7.5 MODELS OF TRANSPORTATION :
Models of transportation means the models which show different patterns of
transport link seen as a network. It gives more importance to lines or links
(edges) or connectivity than the points or areas (nodes or vertices).
1.

Types of models and characteristics :
Models of transportation may be viewed from different perspectives as
follows:
i.

PLANNER MODELS:
These are characterized by edges or links, which have no
intersections or common points except at the vertices. For
example, the following model of a transportation route from A to E
shows it :
A
B

C

Vertices
D
E
Edge / Link

ii.

NON – PLANNER MODELS:
These are characterized by edges or links, which have several
intersections or common points including the vertices. For
example, the following model of transport routes from points A to
E shows it:
A

B

E

D
iii.

SIMPLE MODELS:
C

These models may be quite simple as shown below:
Simple Planner Model

Simple Non - Planner Model

A

A

B

E
B

C

D

C

D
E

These reflect lower connectivity.
iv.

COMPLICATED MODELS:
These models are quite complicated and reflect higher connectivity.
Following is an example of a complicated model of transportation
(Planner model):
A

B

E
C

D

Following is the example of a complicated Non-planner model:

A

B

C

D

E
NOTE: In case of a non-planner model, simplicity or complication is a relative
concept. Complicated Transportation (non-planned) models are likely to be more
connected compared to the Transportation models for planned ones for the same
number of points or vertices.

(v)

BUILDER FRIENDLY :

Such models of transportation are builders - friendly in the sense that
these minimize the routes and at the same time ensure that points or
vertices are connected in the network. This minimises the construction
cost of the entire work and maximises revenue generation from the
routes.
(vi)

USER FRIENDLY:
These transportation models are user - friendly, because they connect
all the points with each other. In other words, these are non-planned
complicated type of transportation models showing 100% connectivity.
This minimizes the cost of transportation by providing to the user the
shortest route possible between any set of two given points. However, this
causes inefficiency to builder in terms of construction cost.
Thus, we may a clear out idea of the transportation models from the
following flow chart:

TRANSPORTATION MODELS

SIMPLE

PLANNER

BUILDER
FRIENDLY

i.

USER
FRIENDLY

COMPLICATED

NON - PLANNER

BUILDER
FRIENDLY

PLANNER

USER
FRIENDLY

BUILDER
FRIENDLY

USER
FRIENDLY

SHAPES OF TRANSPORTATION MODELS :
AIR

LAND

WATER

NON - PLANNER

BUILDER
FRIENDLY

USER
FRIENDLY

Any type of shape may emerge like Hexagonal, diamond, Star, circular,
radial, etc. depending on the way the vertices/nodes or points are
connected with each other through edges, links or routes.
1. IMPORTANCE OF MODELS OF TRANSPORTATION :
1.

Models

show the number

of maximum possible routes in a given

network, i.e., 0.5 (m2 -m)
2.

Models show the connectivity of the vertices/models/points covered by it,
i.e. ,

2(0r)
m2 – m

3.

Models help practically in avoiding constructing non-profitable routes.
Routes/edges/links or transport network developed may cause often
financial losses to the builders. For example, poor-decision making led to
failure of the great central railway from Sheffield to London, the last
major railway line to London, in 1893-99, because it never paid any
profits. Whereas some transportation networks like Panama Canal have
proved profitable.

2. ELEMENTARY MEASURES (topological) of Network structures (based on
gross characteristics) :
1.

For Planner Graphs:
(1)

Cyclomatic Number (µ)

=

E–V+G

(2)

Beta Index (β)

=

E/V

(3)

Alpha Index (α)

=

E-V+G
2V-5

(4)

Gamma Index (γ)

=

100

2.

For Non Planner Graphs:

(1)

Alpha Index (α)

=

(2)

Gamma Index (γ)

=

7.8 OBJECTIVE OF THE STUDY OF TRANSPORTATION :
1.

Analysis of transport linkes as a network to measure accessibility and the degree
of connectivity.

2.

Measurement of volume of traffic on transport links as flows producing a
complex pattern of principal and subsidiary routes.

3.

Studying Transport as a space – adjusting technique in terms of bringing
together of supply and demand by a reduction in distance between them and as
an analysis of economic distance. Economic distance is determined by the
distance upto which a commodity can be carried depending on the transport cost
and the increase in its value.

7.9 VARIATION IN COST OF TRANSPORTATION
1.

INTRODUCTION :
Cost of transportation varies according to many factors like type of medium of
transportation, geographical/economic distance covered, terrain, commodity to be
carried. These can basically be reduced to 3 elements:
(1)

Operating costs

(2)

Profits expected by the carrier at the time of rate determination

(3)

Government Policies.

2.

VARIATION :
Following graph shows a simple case of variation in cost according to different
methods of transport :
Y

Road
Transport Costs

Rail
Water
C

T3
T2
T1

B
A
X
Distance

T1, T2, T3 represent overhead cost or the terminal costs of Road, Rail and Water
transport

(Ocean) respectively.

Ocean transport has greatest terminals cost,

because it need costly vast apparatus of ports with handling facilities. Whereas,
Road transport does not need such vast terminals, as even goods can be located
near godown along any motorable path. Railways require terminal costs between
the terminal costs of road and water (Ocean) transport. However, roads have
higher line – haul cost (cost of moving goods – fuel costs and wages ), because
only relatively small loads are carried and so the costs get spread over a few items
of cargo only. Oceans have lowest line – haul cost, because these rise slowly with
increasing distance due to their spread over much larger cargoes. Rail transport
cause intermediate type of line – haul costs.

Thus, as the above explanation of graph clearly shows ,the road transport is
cheapest over short distances (A-B), rail over medium distances (B-C) and ocean

transport over long distances (Beyond C). However, this is very much an
oversimplified and highly idealised explanation of transport costs. Transport cost
is affected by numerous others factors in addition to geographical distance and the
medium of transport.
3.CLASSICAL CASE STUDY:
Van Royen & Bengstn published in 1964 comparative Transport costs per Tonne
– Kilometer between methods taking railway transport costs as base of 100. This
study shows water transport to be the cheapest, followed by rail, road, airways in
that order. Following is the result of the case study: -

Medium

Method

Cost
( Rail transport = 100 )

Land

Man
Horse & Cart

Water

Air

1,800 – 1,700
1,800

Road

430

Rail

100

River

28

Ocean

14

Great Lakes

7

Air Craft

1,500

4.TYPES OF COSTS :
(1)

Line - Haul costs

(2)

Overhead Costs (cost of equipment such as terminal facilities, ships, or
railway track, etc.)

(3)

Transfer costs (indirect costs like insurance cover for the cargo).

5.FACTORS OF VARIATION IN TRANSPORTATION COSTS :
(1)

GEOGRAPHICAL/ECONOMIC DISTANCE:
Quite naturally costs increase with an increase in geographical distance. For
example, a journey of 700 km will cost more than a journey of 400 km,
because terminal costs can be spread over more distance (long – haul
advantage) .Break – of – Bulk point may increase costs. However, provision
of in – transit privileges may help keep costs constant, i.e., grains from
canadian prairies enjoy such a privilege.

(2)

TERRAIN:
Terrain causes variation in transport cost. It is costly to cross land than oceans.
Likewise, it is costly to cross mountains than plains.

(3)

TYPE OF CARRIER:
Carrier causes variation, too. Petroleum movement through pipeline is less
costly than through tankers.

(4)

COMMODITY:
Different commodities attract different transportation costs. Raw materials /
semi finished products, being of low value and requiring less handling and
other charges are cheaper to transport than the finished products / breakable
/perishable articles which require much care ,handling and specialised packing
leading to building of higher transport charges.

Some non – perishable

articles may not increase costs, however, other non – perishable articles may
require special need , and care like precision instruments / passengers which
causes higher transportation costs. For example, a tonne of coal is cheaper to
transport over the same distance than the refrigerated treat, since refrigeration
increases costs. Type of commodity is the basic factor determining the
level of a freight rate.
(5)

COMPETITION :
Monopoly of any type of carrier causes higher transportation costs.
Competition leads to lower transportation costs, since every carrier tries to
attract business by offering lower freight rates compared to the competitor.
For example, competition offered by New York state Barge has forced to keep

railway freight rates low between New York and the Greak Lakes. This has
meant that freight is transported more cheaply over a greater distance (1,446
km) from Chicago to New York than over a smaller distance (1,309 km) from
Chicago to Philadelphia. Earlier in 1836, freight rates fell from 12 ½ P per
tonn to 1 ½ p on the Loughborough Navigation.Slashing of airfare in 2002 by
nearly 40% by Jet Airways and Indian Airlines on pune-delhi air route has
narrowed the difference in fare charged by the railways and airways on punedelhi sector triggering a cut throat fare warfair between railways and airways ,
since by paying this just nomi nal higher airfare the traveler feels tempted to
travel by air saving 22 hours of journey!
(6)

QUANTITY

AND

FREQUENCY

OF

COMMODITY

MOVEMENT:
Commodities moving in large quantities cause less transport charges, because
even after charging lower rates per unit, the carrier can still get a large volume
of cumulative profit. To get the same level of profit as a full cargo, the carrier
charges higher freight rates per unit, if quantity of commodities is quite less.
Likewise frequent movement of commodities ensures steady and cumulative
profits to the carrier, even after charging less. Also, a carrier charges less the
frequently moving commodity to earn the goodwill of the shipper.
(7)

CONCESSIONS:
Transporter may give back – haul rates to the customer to avoid empty return
of the cargo containers from the point of destination. These rates for goods
movement from destination to origin may be quite less than that for movement
of cargo from origin to destination. The idea is to earn whatever is possible
and it is a bonus of sort to the carrier. For example, the return of grain flows
from the Prairies to the Atlantic ports of North America enjoy such a
concessional rate.

(8)

SPECIALISED NATURE OF SERVICES :
Premium or higher rates may be charged when specilised services are
provided. For Example, higher rates are charged for high-speed passenger

train Shatabdi. than the normal - speed trains in India. The charges for a
chartered plane are higher than a flight aboard regular passenger aircrafts.
(9)

GOVERNMENT POLICIES :
Government policies cause variation in transport cost , also. These policies
relate to three groups - Economics, Political and Social.
As regards economic reasons, government may take a decision to concentrate
or disperse economic activities. In India, industries have been encouraged to
be set up or disperse to remote undeveloped areas through provision of cheap
reliable transport lines despite their high initial construction costs. Ruhr
industrial belt in Germany saw concentration of industries due to differing
govt. policies on transport of iron ore and coal (lower/higher cost respectively)
which encouraged import of iron ore from Sweden more cheaply than the
costly transportation of coal export. As regards political reasons , government
may encourage or discourage provision of transportation and affect freight
rates by placing higher tariffs. For example, this was done in Europe till 1958
by doubling the handling charges on fuel and ore crossing international
boundaries. Trans continental railways of the USA and Canada, and Trans
Siberian Railway line of U.S.A. were created for political binding of the coast
to coast units or large stretches of land. This involved pricing policy,too.
From social perspective too, government influence by making transportation
cheap, since transportation is considered more a social service rather than a
business activity. It does it by 2 means of subsidizing:
(1) Direct cash grants to compensate for losses.
(2) Indirect subsidies by imposing uniform rates over the whole transport
system / network leading to supporting of loss making roots / transports by
the profit making one. Indian railways is able to connect to remote areas
due to this reason.

7.10

MODES OF TRANSPORTATION:

INTRODUCTION:
First of all, let us understand the meaning of the phrase “Modes of Transportation”.
This key words are “Modes” and “Transportation”. Meaning of the word “Mode” is
“Way, Manner, Style”. Meaning of the word “Transportation” is “ Conveyance to
another place” or “Carrying from one place to another”. Therefore, meaning of the
phrase “Modes of Transportation” is “Ways or manners of conveyance or carrying
from one place to another”. “Meaning of the word “Conveyance” is “act of carrying ,
carriage or vehicles”. Thus, above explanation shows clearly that there are different
act of carrying” may take place. It may be by using
animated or lively and inanimated or lifeless ways. Lively ways include use of human
beings and beast of burden. Lifeless ways (in an organic sense) include roadways,
railways, airways, waterways, pipeways, and space ways.
EXPLANATION :
All the ways of transportation follow four broad mediums for passage :
1.

Air

2.

Land

3.

Water

4.

Space

Roadways and Railways constitute main forms of transportation on land. Ocean going
ships and boats/ streamers in inland lakes/rivers/canals form main type of water
transportation. Aeroplanes, helicopters, balloons, cable trolleys, and missiles are the
principal types of air transportation. Of late, Space transportation has assumed
significance, too. It takes place through space shuttles, space crafts and orbiters/satellites
mainly. Gaspipes, Oilpipes and Water pipes are the base of pipe ways kind of
transportation

FLOW CHART SHOWING MODES OF TRANSPORTATION :

TRANSPORTATION MODES

ANIMATED

INANIMATED

BEAST OF
BURDEN

HUMAN
BEINGS

Roadways

Railways

Waterways

Airways

Spaceways

Pipeways

7.11 CHARACTERISTICS OF DIFFERENT MODES OF TRANSPORT
1.

INTRODUCTION :
First of all, let us understand what we mean by the term “Characteristics” of
different modes of transport. It means special features which are peculiar only
to a particular type of transport. These features may be advantageous or
positive and disadvantageous or negative.

2.

CHARACTERISTICS :
i.

AIR : Following are the chief characteristics of air transportation :
a)

POSITIVE/ADVANTAGEOUS :
1.

It saves time, because it allows travel at very high speeds as
compared to other modes of transportation like water or
land.

2.

It helps follow great circle routes on the earth’s surface,
since there are no obstructing features of the earth’s
surface.

3.

In times of emergency like floods, this is the only mode
available to transport relief materials.

4.

It does not requires maintenance of a large network of
infrastructural facilities like roads, water ways, canals, etc.

5.

It can sometimes take advantage of prevailing winds to
achieve speed just as in case of jet streams.

6.

Its very useful in transporting perishable ,delicate and high
value small items.

7.

Its very useful during war times to quickly transport troops
and attack enemy posts with lethal effect.

b)NEGATIVE / DISADVANTAGES :
1.

Its very costly and out of the reach of the common people.

2.

Its operational and maintenance costs are astronomical.

3.

It is ineffective during bad weather which sometimes creates problems of
visibility to aircraft causing crashing of planes.

4.

It requires highly trained and skilled people to drive the Aeroplanes.

5.

It is the most risky mode of transport ,because even a slight mistake by a fraction
of second may lead to pilot error causing crashes leading to violent deaths of
passengers.

6.

Its very costly as regards low value bulk items.

7.

Aeroplanes are easy targets by terrorists.

3.

ROADS :

A)

POSITIVE /ADVANTAGES :
1.

Its cheap over short distances on land.

2.

It can be followed on foot, too.

3.

It does not require construction of costly infrastructure like Aerodrums.
Simply, any piece of land on which a vehicle can be parked is sufficient.

4.

It helps in direct delivery of products at the door-step of the consumers.

5.

The transporter can earn profit on return journey by bringing products
back from destination even if on low charges, because the cost of plying
vehicle to and for already is recovered from the original customer.

B)

NEGATIVE/DISADVANTAGES :
1.

Inaccessible and remote physical terrain discourages land transport.

2.

It may get badly affected and rendered useless during natural hazards like
floods, earthquakes.

3.

Its costly over long distances as compared to sea and rail transport,
because the cost of wear and tear outweighs the benefits of spread of
economies of scale.

4.

Unlike sea and air mode, land transportation requires a vast network of
good metalled and motorable all weather roads.

5.
2.

It requires continuous maintenance of roads.

WATER :
Sea, Lakes, Rivers, Canals
WATER BODIES :
A)

POSITIVE/ADVANTAGES :

1.

It is economically very cheap over long distances as compared to other
modes, because there are no maintenance costs of routes involved.

2.

It is suitable for transporting low value-high volumes commodities.

3.

It can ma ke use of prevailing wind directions to cut down costs on fuels,
i.e.; sailing from Europe to USA under the influence of North Eastern
trade winds and then sailing back to Europe under the influence of
prevailing south westerlies.

4.

Tunnels under sea bed can be constructed to make travel easier, i.e., tunnel
beneath ocean between France and U.K. has made the travel easier. A
plan to link Spain and Morocco by building a tunnel (39 km long) 400
meter below sea level under the strait of Gibraltar already has been drawn
up. Point Paloma (Spain) and Malabata (Morocco) are chosen sites .It is
300 metre below sea level at its deepest point and would cost us $ 8 billion
(1996 estimate).

5.

The coefficient of friction on water is small as compared to road and rail.
One horse power can move 4,000 kg on water ,150 kg on road and 500 kg
on rail.The ratio for road,rail and water transport is 3:10:80
respectively.Therefore, water transport is the cheapest.

6.

B)

NEGATIVE/DISADVANTAGES :
1.

It requires good natural or artificial harbours and ports to drop
anchor at.

2.

Increased sedimentation at the mouth of river channels makes
inward navigation from sea quite difficult.

3.

Sudden oceanic upheavals like storms such as hurricanes,
tornadoes may break or sink vessels into the ocean.

4.

It takes a very long time to cover greater distances from origin to
destination as compared to Air transportation.

5.

In times of Crisis, getting help becomes very difficult despite
advanced instruments abroad like , etc., as compared to disasters in
case of Road or rail transport.

7.

RAIL :

A)

POSITIVE/ADVANTAGES :
1.

It is placed midway between road and sea transport as regards
transport cost, whether over short or long run haul.

2.

It does not face problems like traffic congestion as faced
sometimes by road transport over busy routes and crossing.

3.

It provides employment to large number of people, i.e., the Indian
railway the 4th largest in the world is the biggest employer in India.

B)

NEGATIVE/DISADVANTAGES :
1.

It requires heavy initial investment and infrastructure.

2.

It has a long gestation period.

3.

It can’t do door delivery like Truck-farming .

4.

One can’t stop train enroute like Buses and board or alight down as
wished.

5.

A train stops generally at specified marked stops called railway
stations and not anywhere else.

6.

Higher energy is consumed for pulling coaches/wagons on steep
slopes. One foot increase in height every 100 feet is called one per
cent grade. At one percent grade, railway engine is able to pull up

only 1/5th of the load it can pull on a plane surface. Thus,
sometimes two engines have to be used to pull the train. Andes
mountains have a 4 percent grade!
7.

It requires digging of tunnels across non-negotiable mountains. It
is very costly.

(5)

SPACE SHUTTLES/SPACE CRAFTS :

In future, space crafts are likely to transport human beings/commodities, etc. to other
planets and heavenly bodies like moon once colonisation of these celestial spheres takes
place.
A.

POSITIVE/ADVANTAGES :
1.

It makes easy to transport goods, and human beings to far distance
heavenly bodies like Moon.

2.

It makes easy the space travel.

3.

It helps put in sky the artificial satellites useful to human beings like
Remote sensing satellites , etc.

B.

NEGATIVE/DISADVANTAGES :

1.

Its economically a very costly affair.

2.

It requires highly complicated crafts and sophisticated technology.

3.

It carries a high degree of risk of failure.

4.

There are little or no chances of human survival aboard a space craft, if it fails in
space.

(6)

PIPE WAYS :

Pipes have emerged as an important way of transportation. This mode of transportation helps in
carrying gas, oil and water over a large distance.

A.

POSITIVE/ADVANTAGES :

1.

It is one of the best, efficient and economically cheap way of transporting liquids
across great distances.

B.

NEGATIVE/DISADVANTAGES :
1.

It is very costly to build, operate and maintain.

2.

It carries high risk.

3.

Pipelines under ocean can easily be tempered with without any one
having to bear responsibility for it.

4.

Oil pipelines often face political problems, i.e., Iranian gas pipeline to
India through Pakistan found it difficult to take off due to unfriendly
relations between these two later countries.

(3)

SIGNIFICANCE :
A deep knowledge of different modes of transportation and their characteristics is quite
significant on many counts:

1.

It helps in building the best possible efficient transportation network for a given
area or a region by utilising the strengths of different modes and avoiding their
inherent weaknesses. For Example, by constructing Suez and Panama canals,
human beings have taken advantage of water transportation in terms of its cheap
costs. Suez canal has helped connect Atlantic Ocean via Mediterranean sea to
Indian Ocean via red Sea. Likewise, Panama canal has connected eastern pacific
ocean with Western Atlantic Ocean. This has saved thousands of kilometers of
sailing around the cape of Horn, the southern tip of south America. This means

saving in fuel and other costs.
2.

It helps a lot during times of crisis like natural hazards, war, epidemics, etc. by
timely rushing in of aid, relief material and other kind of logistics support.

3.

It helps expand frontiers of human knowledge, skills, and abilities far beyond the
planet earth.

4.

It helps in exploitation of natural and human resources of a given place or region
by providing appropriate and efficient modes of transportation.

5.

It helps avoid building uneconomical transportation systems. For example,
in high mountainous regions, road transportation is more economical than
rail transport.

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