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At the end of the lesson the students must be able to:
1. Understand the location theory as the foundation of planning.
2. Identify the location theory of Johann Heinrich von Thunen and William Alonso.

Dissatisfaction on the part of individuals and groups concerning their relationships with the environment
will lead them to take modifying actions. These changes could include:
- the nature of the activity itself
- the space in which it was carried out
- its location with respect to all other activities
- the kinds of communications made with activities at other locations
- the channels which served to carry or transmit them

Modifying actions cause repercussions on other activities, spaces, communications, and channels. Ex. when
a man decides to leave his car for work and uses the train, his action causes repercussions though how
trivial and unnoticeable. But if several hundred are to do the same, then the effects would be noticeable

Actions taken by individuals and groups in interest can bring about conditions which give rise to serious
social, economic, and aesthetic problems connected with the use of land.

Planning seeks to
a) regulate or control the activity of individual and groups in such a way as to minimize the bad effects
which may arise.
b) promote better performance of the physical environment in accordance with a set of broad aims and
more specific objectives set out in a plan.

Location theory
explains the pattern of land use
indicates a solution to the problem of what is the most rational use of land suggesting ways in which the
current pattern can be improved.

Johann Heinrich von Thunen (1826)

postulated that around a central town
-rural land of constant fertility assumed different forms
(the type of land use varies with distance away from the market)
- land use diminishing intensively in reverse relationship to increased distance from the town.
(The intensity of production declines with distance away from the market)
land in greatest demand would be as near as possible to the market on account of low transport costs.
- the highest rent would be gained for this advantage and the highest value output per hectare would accrue.
outer belt would have little demand for land because of transport costs.
- rent would be low and the value of extensive production would be correspondingly low.

overall use pattern might be modified by the existence of a navigable river.
cost of river transport are low especially for bulky commodities compared to fairly high transport cost
river would have the effect of extending the different land uses almost parallel along its course.
further modification might occur if a small city with its own production zones is located within the land
use pattern of the main settlements.
Von Thunen model assumed unlikely conditions such as production taking place around an isolated market
place and soil being of constant fertility. However, it established a distance-cost relationship which recently
became the basis of urban location theory.
as price mechanism largely decides the profitability or utility of goods and services, it subsequently
determines the location of activity and the spatial structure of the urban area supplying these goods and

William Alonso
rents diminish outward from the center of a city to offset both lower revenue and higher operating costs
and not least transport costs.
a rent gradient would compensate for falling revenue and higher operating costs
different land uses would have different rent gradients, the use with the highest gradient prevailing.
use a prevails up to a distance of 2kms from the CBD, from 2 to 5kms use b is dominant, and beyond
5kms use c prevails.
a change of use could be expected to take place through the price mechanism when one gradient falls below
Alonso model did not specify the type of land use associated with each bid-gradient.
assumed that the urban area has a single nucleus and that the market for land is perfect.

Locational determinants of commercial and industrial use

price and rent of land fall with increased distance from the CBD.
wages are higher in the center
local demand for labor being greater than local supply.
commuting costs need to be offset by higher remuneration. (transport cost more of a reflection of
accessibility than distance)
locations close to junctions, nodes and terminals are particularly favored maximizing proximity to
suppliers and markets.
decentralized shopping centers are being developed following road improvement and increased car
modern manufacturing industry relies increasingly on heavy road vehicles for long distance
transportation and incurs lower transport costs on the fringes of cities than at more central locations.

retailing revenue is determined by the size of the shopping catchment area or hinterland, not just in terms
of population but in terms of purchasing power.
distribution of the day-time population and points of maximum transit (where people cluster together)
are also important.
in the case of offices, the spatial distribution, number and size of client establishments determine
revenue is thus greatest within the CBD and so are the aggregate costs.
as distance from the center increases, revenue falls and aggregate costs (after falling initially) rises.
this is due to the upward pull of transport costs, which are no longer offset sufficiently by economies in
the use of land and labor.
only within a fairly short distance from the CBD are commercial users able to realize high profitability.

to maximize profits, firms need to locate where they can benefit from both the greatest revenue and from
the lowest costs.
specialized functions and activities serving the urban market as a whole will locate centrally.
firms requiring large sites and those attempting to reduce costs of over-concentration will be attracted to
the suburbs.
firms locating close together to benefit from complementary will incur lower costs because of external
economies and enjoy higher revenue due to joint demand.
since there is a high degree of inertia, most firms find it difficult to adjust their locations to the optimum.
a satisfactory rather than ideal location moreover is established by zoning and land use controls.
A mixture of interacting influences usually explain each locational decision. price mechanism largely decides the profitability or utility of goods and services, it subsequently
determines the location of activity and the spatial structure of the urban area supplying these goods and
.....high levels of accessibility within the CBD are reflected in low transport cost attracting greatest demand
for commercial sites
.....conversely, low over-all accessibility and high transport cost outside urban areas will attract a much
lower level of demand.
.....other possible influences: changes in population, technology and transportation, pressures from
redeveloped central areas and local and central government policy.

A factor which, as propagated by the adage location, location, location is considered to be the foremost
determinant in the catalyzing of the decision to purchase.

True in the practice of conventional suburban development

Downside being that a preexistence of excellence in location is

invariably associated with high cost of land acquisition

Created by proximity to a desirable factor such as transportation, a waterfront, a slope, a long vista, a
pleasant climate, a popular resort, or a desirable community

Only method to economically achieve the value added by location is to create it on inexpensive land
through Planned Neighborhood Development.

1. Describe the location theory of Johann Heinrich von Thunen.
2. Describe the location theory of William Alonso.
3. What are the locational determinants of commercial and industrial use.