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Clark University

Reviewed Work(s): Location and Land Use: Toward a General Theory of Land Rent by
William Alonso
Review by: Michael Chisholm
Source: Economic Geography, Vol. 42, No. 3 (Jul., 1966), pp. 277-279
Published by: Clark University
Stable URL:
Accessed: 21-07-2017 08:36 UTC

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earlier The Image of the City (Cambridge, Mass., Location and Land Use: Toward a General
1960), is a solidly empirical book. Drivers' Theory of Land Rent, by WILLIAM ALONSO.
perceptions were recorded as they moved at xi and 201 pp.; diagrs., index. Harvard
various speeds on several urban highways in University Press, Cambridge, Mass., 1964.
the East, most systematically along 6Y4 miles $5.50. 8'2 x 534 inches.
of the Northeast Expressway from Revere to
downtown Boston. Sketches of dominant ob- At a casual glance, this book appears to
jects, surfaces, and other visual impressions assume a considerable knowledge of mathe-
supplemented these stream-of-consciousness ob- matics. In practice, by a skillful arrangement
servations. A composite subjective landscape of the text and a careful use of diagrams, the
emerged, showing what people actually saw, author has made it possible for the non-mathe-
how they saw it, and how they related it to matician to follow most of the argument if he
themselves. will bother to learn the meanings attached to a
A notation system expresses all these visual small number of symbols. The more sophisti-
impacts in diagrammatic form. There are cated sections are in effect elaborations of points
different sets of symbols for the apparent made in a simple and comprehensible manner
motion of the observer and of his visual field, for in the text.
the nature and position of surrounding objects To introduce his subject, the author briefly
and surfaces, for the proportions of space en- traces the history of ideas concerning the nature
closed in the visual field, for the intensity and and origin of land value, from the eighteenth
direction of light, for spatial sequences, and for century to date. Virtually all authors since
the direction of principal views. But the symbols Ricardo and von Thanen have regarded land
are so numerous and varied-some are wholly value as arising from the advantages that one
abstract, others ideographic, still others pic- site has over another for particular kinds of
torial-that the notations convey little of the activity or for specific users (firms or individ-
general impression and can be interpreted in uals). Such advantages arise from the varying
detail only with considerable effort. nature of sites (Ricardo's case) or from location
Finally the authors show how routes could (von Thanen), or from both in combination. By
be relocated and roadways and surroundings a process of bidding which may be actual or
designed to enhance the pleasure of driving. merely potential bidding-between users and
Visual access to landmarks and to landscape uses, each site is allocated to the highest bid.
features that identify and enrich locality and If the market economy functions without any
orientation; a wide range of pattern, texture, impediment, the highest bid will be made by
and color in pavement, terrain, and building that use/user for which the disadvantages of
material, displayed in an ordered sequence; being at some other site are the greatest. This
transitions from tunnelled enclosures to open approach is common ground to most writers,
space; and changes in slope and curvature, speed and it has been highly developed in the context
and acceleration, light and shadow, are some of agricultural location. Rather less attention
of the considerations they stress. has been given to the question of intra-urban
The View from the Road deals principally patterns of location and most of the work in
with the commuter's route into the central city. this particular field has borrowed von Thtinen's
Similar inquiries are needed for roads in other ideas on agricultural location, in which the
environments and with other users. We should central theme is distance from a single market
also learn about the visual impact of roads on center and the resulting pattern a series of con-
residents and pedestrians, of whose milieu the centric circles of various land uses.
highway also forms part-all too often an in- Alonso accepts this approach and applies
trusive part, jarring in appearance, daunting in it to the problem of intra-urban patterns of
scale, disruptive in location. Such studies might land use. In itself, this is orthodox procedure,
well utilize the techniques employed in this but the author makes an important contribu-
pioneering volume. But they ought not emulate tion by directing attention to: (1) the distribu-
its physical qualities. Scattered more or less at tion of residential land uses, particularly to
random on the oversized pages of this cumbrous different quality levels of residential use (tene-
book are small photographs, diagrammatic ments, suburban villas, etc.). (2) The fact that
sketches, bits of text with marginal numbers, in establishing the relative locations of land
and large areas of white space. The idea of por- uses it is important also to consider the size of
traying sequential experience within the com- plots demanded. Both of these points have
pass of one page does not justify the scrappy been curiously neglected in the literature, de-
appearance of the whole. Nor does the design spite the fact that von ThiUnen made specific
reference to the question of farm size. The
justify the price of the book. At $15 it is beyond
other significant contribution made by Alonso
the reach of most potential readers.
is a formulation of the manner in which bids
DAVID LOWENTHAL for plots of land can be determined if the neces-
sary data are available.
A merican Geographical Society The problem that Alonso sets out to explore

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is the mechanism whereby the actual and poten- of time better founded assumptions can be
tial bids of users and uses are reconciled to incorporated. Second, is the question whether
produce an equilibrium situation. For this to the model as developed is internally consistent.
be achieved, all firms and individuals must be Fundamental to Alonso's argument is the
in equilibrium and all sites within the settled proposition that all travel is radial to the center
zone must be occupied. Numerous simplifying of the city, where all service and employment
assumptions are made, of which only a few key facilities are found. The location of one category
ones are here mentioned. The terrain is com- of land use is thereby assumed as given, though
pletely uniform and all land is available un- the possibility of two or more urban centers
encumbered by legal restrictions or existing competing with each other is allowed in Chapter
buildings and other constructions. All employ- 6. From the beginning, therefore, it is ambitious
ment and all services are concentrated in the to claim that the book is an approach to a
center of the city. Property owners are divided general theory of land rent; at the most, it is
into three classes-agricultural producers, man- a contribution to a partial theory, since employ-
ufacturing or service entrepreneurs, and private ment and shopping facilities, etc., may as well
households on residential sites. With modifica- be on the periphery of towns as in the center.
tions to suit each of these three classes of land One aspect of this defect is especially evident
user, the price that can be bid to command in Chapter 3, where the urban firm, allegedly
any site depends primarily on its location, which engaged in any kind of activity, is really treated
equals distance from the center of the city (i.e., as a retail outlet. The location of a shop with
distance from places of work, marketing of respect to the center of a city does materially
farm produce, shopping, etc.). affect its volume of sales as well as its costs of
In the case of agriculture, a farmer can sell operation, whereas only the latter will vary
all his produce in the central market at the significantly for a manufacturing enterprise.
ruling price and the major factor affecting his The confusion between an urban firm in general
revenues (and one should add disbursements) and a retail outlet in particular leads Alonso
is the cost of transport to the city. The price into a further error. The analysis of the urban
that can be bid for land is, therefore, the trans- firm is based upon the assumption of monopoly
port saving obtained compared with that for trading, which is tenable if one conceives of
other plots further from the city. The urban retailing as occuring at geographically separate
entrepreneur must consider both the costs of sites, each outlet having a monopoly of sales
running a business and the volume of sales within a defined territory. From this assump-
pertaining to each site, in his attempt to max- tion of monopolistic practices, the author argues
imize profits. Size of plot is, therefore, im- that each urban firm will seek to maximize its
portant for the urban firm, as this will affect profits and by implication the realized profits
the volume of sales at a particular site for a will vary from firm to firm (p. 55). This con-
given kind of activity. (The author fails to ception is inconsistent with the idea that all
recognize that the same is true of agricultural functions are concentrated at the city center,
enterprises.) The private citizen seeks to max- for, if all purchasers have to travel to the middle
imize his satisfaction from a family budget of the town, wherein resides the monopoly
that can be taken as fixed. His expenditure is element for each enterprise? Furthermore, it is
divided into three parts: cost of commuting, difficult to see how other urban enterprises, such
which increases with distance from the center; as manufacturing establishments, can gain
outlay on land, which varies with location and monopolistic advantages from location at one
the size of plot; all other expenditures. Pay- spot rather than another within the city. But
ments for land and transport are regarded as worse still, the possibility of variable profit
substitutes for each other and Alonso assumes levels is ruled out on page 77: one of the condi-
that the sum of these two outlays bears a fairly tions that is given for the land market to be in
regular relationship to income. equilibrium is that "no user of land can increase
Given these propositions, it is possible to his profits or satisfaction by moving to some
derive for each firm and household a series of other location or by buying more or less land."
bid-price curves. These are statements to the To meet this condition, "normal" profits must
effect that for any ruling circumstances the firm prevail for urban firms, just as they are assumed
or individual would be willing to bid x pounds to prevail in the agricultural sector. The treat-
per acre for each of sites I . . . n. From these ment of profits and of the conditions or com-
bid-price curves, the general distribution of petition is therefore inconsistent.
urban land uses can be derived. In the agricultural sector, it is assumed that
The model that is developed is open to criti- there is unlimited freedom for farmers to enter
cism on two main grounds. In the first place, (or leave) the business; for urban firms, a limited
many of the assumptions are unrealistic. But freedom of entry and exit is postulated (which
it would be churlish to pursue this criticism in is consistent with the assumption of monopolistic
view of difficulties inherent in the construction trading conditions); on the other hand, the
of models and the hope that with the passage number of residents seeking sites is taken as

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given. Therefore, for example, if a new urban (A marginal net revenue that becomes negative
firm is established and seeks to recruit em- is, however, to be expected for any enterprise
ployees, these can be obtained only by attract- that becomes too big.)
ing workers from another firm, in which case Occasionally, the notation t used for equa-
there is no net addition to employment oppor- tions is confusing. For example, on pages 45
tunities, or by absorbing previously unemployed and 53 the expression V = V(t, q) appears,
workers. Under the assumptions made by the where V is the volume of sales in dollars, t is
author, there is no particular reason why an location of the firm and q is the size of the
equilibrium that allocates all land and so clears site. The expression ought to be written in the
the land market will also ensure full employ- form that V is a function of t and q, rather than
ment for all citizens and productive resources that V equals V multiplied by some factor
other than land. This is a problem analogous of t and q.
to that which Keynes attempted to solve for Alonso draws a number of conclusions from
a national economy. Unless the number of all his analysis. Since the logical basis on which
three classes of land user is allowed to vary, the they rest is itself somewhat suspect, the con-
analysis developed by Alonso must remain a clusions must in some cases be treated with
partial theory and may not be able to yield a reserve. Nevertheless, they are important and
genuine equilibrium, since the existence of deserve to be tested, something for which the
unemployed labor or capital equipment would author makes a strong plea. First, and this is
affect the bid-price curves of individuals and incontestable, Alonso shows that the optimum
firms. spatial arrangement of a city will not necessarily
The last major point to be noted here is the be one in which the sum of "friction " costs
convention adopted by the author of analyzing (travel expenses plus land rent) is minimal. The
the value of land nude of development, i.e., site notion of minimal friction costs as the optimum
value. In the whole of the discussion, it is the arrangement can only be sustained on the
price and quantity of land that is considered ceteris paribus principle that all the other values
and no explicit account is taken of the cost of of society are given. This is an unlikely proposi-
buildings. The outlay for residential buildings tion because it implies a particular set of prefer-
may be included in the item "all other goods ences among land users. Second, and highly
and services" on which the individual spends
plausible, is the proposition that those users
whatever is not taken up by the cost of land
whose bid-price curves decline steeply with
and commuting. If this is the case, it would
distance will obtain the use of the land near
help the analysis if the cost of capital invest-
the city center; users whose bid-price curves
ment and maintenance of constructions were
decline slowly will be "pushed" to more distant
considered explicitly, since it seems reasonable
areas. The only serious qualification to this
to suppose that it is land plus buildings plus
commuting that bears a constant relation to proposition is that potential users of land whose
income, not just the cost of land and commut- bid-price curves have a steep slope, but whose
ing. In this context, the empirical material that highest bid-price is low, will in fact be priced
is quoted in support of the theoretical argu- out of the particular land market. Third, is the
ment, drawn from Philadelphia, relates family conclusion that it is quite normal for low-income
income and location to the amount spent on families to occupy central sites of high value
developed residential sites (pp. 125-127 and while high-income families are located toward
170-171). Therefore, not only is the theoretical the urban periphery, where land values are
formulation incomplete, but the supporting lower. The key to this apparent paradox lies
empirical material is in fact based on somewhat in the amount of space purchased and the
different values. quality of the accommodation. A large number
In addition to the above major points, there of low-income families crammed onto a limited
are some minor blemishes in the book that site may yield a higher annual rent per acre
could usefully be rectified in a second printing. than will a richer family occupying a larger
The discussion of the urban firm (a retail out- area. There is, therefore, no need to explain the
let) takes account of marginal costs and revenues phenomenon in terms of obsolescence of proper-
for sites of various sizes and at different loca- ties, population growth, or the immigration of
tions. On page 46, and also in Figure 13, mar- alien communities, or by other special circum-
ginal gross revenue is assumed to decline as the stances. This is an important but controversial
plot size becomes bigger, eventually becoming finding that needs further examination.
negative. At least in the retail trade, it seems In sum, this is a stimulating book on an
more plausible to suggest that marginal gross important theme but it needs to be read with
revenue will initially increase with size of plot care. If it is recommended to students, some
before the decline sets in. A negative marginal guidance ought to be offered lest they become
gross revenue seems unlikely for a retail store a little confused.
and certainly would not apply to some kinds MICHAEL CHISHOLM
of urban enterprise, such as manufacturing. University of Bristol

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