The Central Place Theory

TABLE OF CONTENT
Abstract

CHAPTER 1
1.0 Introduction
1.1 Spatial Structure of Cities
1.2 Literature Review

CHAPTER 2
2.0 Central Place Theory
2.1 Terminologies under the Central Place Theory
2.2 Aims of the Central Place Theory
2.3 Assumptions of the Central Place Theory
2.4 To Calculate the Degree of Centrality

CHAPTER 3
3.0 Hierarchy of Settlements
3.1 Characteristics of the Central Place Theory
3.1.1 Three Lessons from the Simple Central Place Theory
3.2 Concepts of the Theory
3.2.1 Threshold
3.2.2 Range of good or services

CHAPTER 4
4.0 Principles of the Central Place Theory
4.0.1 The Marketing Principle
4.0.2 The Transportation Principle
4.0.3 The Administrative Principle
4.1 Distinct Rules
4.2 Relevance of Central Place Theory
4.3 Advantages of Central Place Theory

CHAPTER 5
5.0 Faults of Christaller’s Model
5.1 Conclusion

REFERENCES

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LIST OF FIGURES
FIG 1: Showing the Central Place Theory Pattern
FIG 2: Showing the hexagonal spatial configuration of the five central order place system.
FIG 3: illustrate the representation of the hierarchy of settlement
FIG 4: Illustrate a chart representing the size distribution of cities with central place theory
FIG 5: Showing the two basic concept of Central Place Theory
FIG 6: Showing the illustration of the Marketing Principle of Central Place Theory
FIG 7: Showing the illustration of the Transportation Principle of Central Place Theory
FIG 8: Showing the illustration of Administrative Principle of Central Place Theory
FIG 9: Showing the map of U.S Midwest and the illustration of the model applied

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Abstract
The central place models are fundamentally important in theoretical geography and city
planning theory. Identifying changes in the spatial structure of cities is a prerequisite for the
development and validation of adequate planning strategies. Nevertheless, current methods of
measurement are becoming ever more challenged by increasingly dispersed forms of urban
organization. Being motivated by the recent availability of large-scale data on human activities,
this paper proposes a new quantitative measure for the centrality of locations, taking into account
both the number of people attracted to different locations and the diversity of their activities.
This ‘centrality index’ allows for the identification of functional urban centres and for a
systematic tracking of their relative importance over time.

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CHAPTER 1
1.0 INTRODUCTION
The spatial organization of cities is dynamic and cannot be defined because it changes always
over time, the urban spatial structure has always gone a large way in determining the lives of the
individuals in the society. Throughout history large cities have always developed from small
settlements which always centre about a source of livelihood. Although settlement spatial
organization has evolved throughout the years there has been several theories about how the
settlements grew into what it is today, and one of these theories is the Central Place Theory by a
German geographer Walter Christaller.

Over the last century and a half, many cities have been spreading out, sprawling at much
lower
population densities and thus growing into vast metropolitan areas. In tandem (tandem is an
arrangement in which a team of machines or animals or people are lined up one behind another,
all facing in the same direction) with this development, the socio-economic functions of
traditional central business districts (CBDs) have been increasingly taken over by a multitude of
dispersed and interacting hubs of employment, business and leisure (Anas et al., 1998).
Understanding these new ‘polycentric’ forms of urban organization is crucial for the
development of adequate planning strategies, since the spatial structure exerts strong influence
on people’s daily life, economic growth, social equity or sustainable urban development (Anas et
al., 1998; Horton and Reynolds, 1971; Rodrigue et al., 2009).

Central place theory seeks to explain the relative size and spacing of human settlements,
including cities and towns, as a function of people’s economic activities, especially shopping
behavior. In fact, geographers have long recognized that the functions of cities and towns as
market centers, traffic centers, or administrative centers result in a hierarchical system of
settlements. The tendency for central places to be organized in hierarchical systems and network
structure was first explored by Christaller (1933/1966), and his ideas led to central place theory,
which was consolidated and developed by Lösch (1940/1954). From then on, this theory went
gradually beyond geography and influenced many related fields, including economics, sociology,
city planning theory, and even physical geography. Central place theory was developed in the

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1930s, following the observation of recurring patterns in the arrangement of settlements of

different sizes (Christaller, 1933, Baskin, 1966). It explains the number and locations of cities,
towns and villages based on principles of market areas, transportation and socio-political
interactions between settlements. Central place theory predicts a hexagonal segmentation of
space, such that six lower-order settlements (e.g. towns) arrange around one higher-order
settlement (e.g. a city).

Central Place Theory has been shown to apply in a number of places, especially when the local
situation is close to the underlying assumptions of the theory (Berry and Garrison, 1958b, Brush,
1953, for example). Even in cases where the spatial arrangement of the settlements cannot be
easily explained by Central Place Theory, the formation of lower-order settlements around
central places that provide certain goods or services is still evident and can be observed
everywhere in the developed world. As such, Central Place Theory explains networks of
dependencies, where smaller settlements depend on goods, services, and the job markets of a
larger settlement in their vicinity.

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1.1 SPATIAL STRUCTURE OF CITIES

This is the arrangement of urban public space. The way that urban public space is arranged
affects many aspect of how cities function and has implication for accessibility, environment
sustainability, safety, social equity, social capital, cultural creativity and economics.
The spatial structure of the city we live in is seen as the outcome of unplanned cities of the past
but things are changing new cities are being brought up with intent from achieving a goal from
the on start. However, different urban spatial organizations perform differently. For instance,
some urban shapes are unfavorable to the development of public transport; others tend to
increase the efficiency of public transport while reducing residential floor consumption. Urban
spatial structures are very resilient and they evolve only very slowly. For this reason, a city’s
spatial structure significantly reduces the range of available development options.

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1.2 LITERATURE REVIEW

Central Place Theory has been studied and evaluated from a number of perspectives
since the 1930s. Berry and Garrison (1958b) performed a detailed analysis of central places
in Snohomish County, Washington. They found the predictions of Central Place Theory
largely confirmed by the data collected, with the exception of a small number of places
that had seen a recent increase in population. They also used the data collected during
this study to show that Losch’s idea of an economic equilibrium between places (Losch,
1954) does not hold below certain population densities or levels of urbanization (Berry and
Garrison, 1958a).

Hsu (2012) later showed that the city sizes in Central Place Theory can be
formalized using a power law model. Openshaw and Veneris (2003) evaluated the expected
trip distributions in a central place model against spatial interaction models, finding that
most spatial interaction models were unable to produce the trip distributions predicted by
Central Place Theory. Thomas made some findings on the economic base of small centres and on
the relationship between population and functional complexity. R.G. Golledge, G. Rushton, and
W.A.V. Clark worked with the notion of the spatial behaviour of consumers.

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CHAPTER 2
2.0 CENTRAL PLACE THEORY
A central place is a location which provides one or more services for the population living
around it. A central place can be defined as a settlement at the center of a region, in which
certain types of products and services are available to consumers (King and Golledge, 1978;
Knox and Marston, 2007). In other words, the dominant function of a central place is to provide
market and supply services for the region.
Central place theory is a theory developed by German geographer Walter Christaller, he tried
to explain the development of settlements. He studied urban settlements in southern Germany.
The theory was published in 1933 in Germany and he wrote the book ‘Are there rules that
determine the size, number and distribution of towns’ In the flat landscape of southern Germany,
Walter Christaller noticed that the functions of the settlement structure and size of the hinterland
he found it possible to model the pattern of the settlement locations using geometric shapes.

FIG 1: Showing the Central Place Theory Pattern

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Christaller 1933; Baskin 1966 explains the spatial configurations of central places from a purely
economic perspective, viewing them mainly as locations where people come together to trade
goods and services. The theory is based on a number of assumptions, such as an isotropic plane,
evenly distributed population and resources, profit-oriented sellers, and economic customers who
aim to minimize their travel to obtain goods. Losch (1954) later relaxed this rigid economic
perspective, modifying the theory to optimize for consumer welfare. The rank order of central
places distinguishes hamlets (first-order centers), villages (second-order centers), towns (third-
order centers), cities (fourth-order centers), and regional capitals (fifth-order centers). The figure
below shows the hexagonal spatial configuration arising from the five orders of centers.

FIG 2: Showing the hexagonal spatial configuration of the five central order place system.
Adapted from Openshaw and Veneris 2003

2.1 TERMINOLOGIES UNDER THE CENTRAL PLACE THEORY

A. Simple basic services (e.g. grocery stores) are said to be of low order while specialized
services (e.g. universities) are said to be of high order.
B. Having a high order service implies there are low order services around it, but not vice
versa.
C. Settlements which provide low order services are said to be low order settlements.
Settlements that provide high order services are said to be high order settlements.

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D. The sphere of influence is the area under influence of the Central Place.
E. Centrality is crucial to the development of the urban places and their service areas.
F. Every urban centres has an economic reach i.e. economic reach is a measure of centrality.
G. Hinterland refers to the area surrounding a service from which consumers are drawn
2.2 AIMS OF THE CENTRAL PLACE THEORY
A. This theory attempts to explain the reasons for the size, number, and distribution patterns of
cities, and towns
B. It also tries to produce a framework for geographers to study areas for historic reasons and
for locational patterns of areas today

2.3 ASSUMPTIONS OF THE CENTRAL PLACE THEORY

Being a theory the central place theory made some certain assumptions such as: All areas have
1. The surface of the ideal region would be flat and have no physical barriers (to have an
isotopic surface)
2. Soil fertility would be universal i.e. resources should be distributed evenly
3. Population, purchasing power evenly distributed
4. Uniform transport network that permitted direct travel from each settlement to the other
5. Constant maximum distance or range for the sale of any good or service produced in a
town prevailed in all directions from the town center.
6. No excess profits i.e. there should be a perfect competition

2.4 TO CALCULATE THE DEGREE OF CENTRALITY

Since centrality is essential to the development of the area, the following are used to calculate the
degree of centrality:
1. Central goods and services are those provided only at a central place
2. Range of sale was the distance people would be willing to travel to acquire goods and
services
3. Model evolved consisting of perfectly fitted hexagonal regions

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CHAPTER 3
3.0 HIERARCHY OF SETTLEMENTS
This is the arrangement of settlements according to their orders of importance or size:
1. Hamlet:- fewest goods and services available {post office or none}
2. Village: - includes the region of the hamlet and some additional goods and services {post
office, small shops, etc.}
3. Town: - includes the region of the village and hamlet and provides some additional goods
and services {shops, churches, high school, markets etc.}
4. City: - includes the region of the village, hamlet and town and provides additional goods
and services {large railway station, shopping center, large hospital, museum etc.}

FIG 3: illustrate the representation of the hierarchy of settlement

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3.1 CHARACTERISTICS OF THE CENTRAL PLACE THEORY

Central place theory, which was developed by Christaller, is used to predict the number, size,
and scope of cities in a region. Consider a region with three products: CDs, pizzas, and jewelry.
The region has the following characteristics:
1. Population density - The original distribution of population is uniform. The total
population in this region is 80,000.
2. No shopping externalities - Shopping externalities occur with complementary goods and
imperfect substitutes. The simple central place model assumes that there were no shopping
externalities.
3. Ubiquitous inputs - All inputs are available at all locations at the same price.
4. Uniform demand - For each product, per capita demand is the same throughout the
region.
5. Number of stores - The three goods have different per capita demands and scale
economies:
a. Jewelry: - Scale economies are large relative to per capita demand. Every jewelry store
requires a population of 80,000, so single jeweler will serve the entire region.
b. Compact discs: - Scale economies is moderate relative to per capita demand. Every
music store requires a population of 20,000, so there will be four music stores in the region.
c. Pizza: - Scale economies are small relative to per capita demand. Every pizza parlor
requires a population of 5,000, so where will be 16 pizza parlor in the region.
According to the above assumptions, there are 11 cities. The large city at the center of the region
sells jewelry, CDs, and pizza. The large city has a population of 20,000, meaning that it is large
enough to support four pizza parlors, two music stores, and one jewelry store. Each of the two
medium sized cities has a population of 10,000, meaning that each city is large enough to support
two pizza parlor and one musical store. The eight small cities, which have a total population of
40,000, can accommodate only one pizza store in one city with a population of 5,000.

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The simple central place model generates a hierarchical system of cities. There are three
distinct types of cities: L (higher order), M (medium order), and S (low order). Each city imports
goods from higher-order cities and exports goods to lower-order cities. Cities of the same order
do not interact. The chart below illustrate the size distribution of cities with the central place
theory.

Size D istribution of C ities w ith C entral Place T heory

Size (population)

20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
1 2 3 4 5 6 7 8 9 10 11

Rank

FIG 4: Illustrate a chart representing the size distribution of cities with central place theory

3.1.1 THREE LESSONS FROM THE CENTRAL PLACE THEORY

1. Diversity and scale economies: - The region’s cities differ in size and scope. This diversity
occurs because the three consumer products have different market scales.
2. Large means few: - The region has a small number of large cities and a large number of
small cities.
3. Shopping path: - Consumers travel to bigger cities, not to smaller cities or cities of the same
size.

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3.2 CONCEPTS OF THE THEORY

The theory consists of two basic concepts which are:
3.2.1 Threshold
The minimum population that is required to bring about the provision of certain good or services
3.2.2 Range of good or services
The average maximum distance people will travel to purchase goods and services.
From these two concepts the lower and upper limits of goods or services can be found. With the
upper and the lower limits, it is possible to see how the central place are arranged in an
imaginary area.

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FIG 5: Showing the two basic concept of Central Place Theory

CHAPTER 4
4.0 PRINCIPLES OF THE CENTRAL PLACE THEORY
Christaller noted three different arrangements of central place according to the following
principles
1. The marketing Principle (K=3 system)
2. The transportation Principle (K=4 system)
3. The administrative principle (K-7)

4.0.1 The Marketing Principle

In this principle arrangement of central places, there are three orders of central places, there
can be many orders of settlements
(a) First order service center providing first order services
(b) Second order service center providing second order services
(c) Third order service centre providing third order services
The different orders of settlements arrange themselves in a hierarchy. Generally speaking lower
is the order, larger is the number of settlements and higher the order, greater is the area served. If
the arrangement of the settlements is according to the principle k=3, the theoretical number of
settlements will progressively divides the previous order by 3. One high order central place is
serving three (including itself) of the next lower order central places. The relationship of the
market area between a lower order centre and the centres of the higher level can also be indicated
by the value 3.
FIG 6: Showing the illustration of the Marketing Principle of Central Place Theory

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4.0.2 The Transportation Principle

Walter Christaller pointed out that the market principle was awkward arrangement trying to
connect places in terms of different levels of hierarchy. As an alternate arrangement, Christaller
suggested that transport places could be organized according to what he called transport
principle. The transport principle which can also be called the traffic principle is most favorable
when there are as many important places as possible along one traffic route between two
important towns, the route being established as straight and as cheap as possible. The more
unimportant places may be left aside. According to the transport principle, the central places
would thus be lined up on straight traffic routes which fan out from the central point.

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FIG 7: Showing the illustration of the Transportation Principle of Central Place Theory

4.0.3 The Administrative Principle

Christaller other suggested organizing principle was based upon the realization that from a
political or administrative viewpoint centres it was unrealistic for centres to be ‘shared’. Any
pattern of control which cuts through functional units is potentially problematical. Christaller
suggested that an arrangement whereby lower order centres were entirely with the hexagon of the
higher order centre would obviate such problems. Any pattern of control which cuts through
functional units is potentially problematical. All the six lower order centres are fully subordinate
to the higher order centre which, therefore dominates the equivalent of seven market areas at the
next lowest level.

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FIG 8: Showing the illustration of Administrative Principle of Central Place Theory

4.1 DISTINCT RULES

1. The larger the settlement, the less there are of them and the farther apart they are
2. The less there are of a settlement, the larger the hinterland, or sphere of influence, of its
goods and services
3. Places of the same size will be spaced the same distance apart

4.2 RELEVANCE OF CENTRAL PLACE THEORY

1. This is a model, not reality
2. Use of hexagons explain hierarchy and interconnectedness of places
3. Originally applied to Germany
4. Found to be applicable in China and the Midwestern US

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FIG 9: Showing the map of U.S Midwest and the illustration of the model applied
4.3 ADVANTAGES OF CENTRAL PLACE THEORY
The theory does a reasonably good job of describing the spatial pattern of urbanization. No other
economic theory explains why there is a hierarchy of urban centers. Heilbrun wrote: "A
hierarchy is by definition a systematic arrangement of the classes of an object." In this case the
object is economic centers, large and small. The central place hierarchy provides a description of
the relationship between a central place higher order place and its tributary areas lower order
places.

Central place theory does a good job of describing the location of trade and service activity.
(It also does a good job of describing consumer market oriented manufacturing.) Trade and
service activity has an increasing relevance as the economy shifts from manufacturing to services

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over time. Small-town community economic developers can secure quite specific, relevant
information about what kind of trade or service enterprise will likely work, and what kind of
enterprise will not likely work in a given small community.

CHAPTER 5
5.0 FAULTS OF CHRISTALLER’S MODEL
There are certain faults which exist in Christaller’s model which make improbable or
inapplicable to the real world and these include;
A. Large areas of flat land are rare, which the presence of relief barriers channelling
transportation in certain directions
B. Government intervention can determine the location of central places
C. Perfect competition is unreal with some firms making more money than others
D. People vary their shopping trends, not always going to the nearest centre
E. People or resources are never always perfectly distributed

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5.1 CONCLUSION
In conclusion, geographers are particularly concerned mainly with adding to central place
theory or testing it. Urban planners are employing ideas from central place theory, but for one
reason or another, do not acknowledge it because it is not realistic and applicable. The piecemeal
application of central place theory seems to indicate that the theory is not recognized as an
important planning element. This can be summed up in Brian Berry's statement that (The central
place concept has yet to be systematically incorporated into planning models). It must be
recognized that central place theory like most theories has practical limitations, but does provide
an organized framework.

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REFERENCES
Arthur O’ Sullivan: Urban Economics, Irwin McGraw-Hill, 2000.
Christaller, W. (1933), Central Places in Southern Germany, translated by Carlisle W. Baskin
(1966), Englewood Cliffs, NJ: Prentice-Hall.
Google Images
Hsu, W.T. (2012), “Central place theory and city size distribution,” forthcoming, Economic
Journal. Openshaw S, Veneris Y, 2003, "Numerical experiments with central place
theory and spatial interaction modelling" Environment and Planning A 35(8) 1389–1403
([1])

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King, L. J. (1984), Central Place Theory, Beverly Hills, CA: Sage Publications.
Lösch, A. (1940), The Economics of Location, translated by W. Woglom (1956), New Haven,
CT: Yale University Press.
Smith, Margot W. The Economics of Physician Location, Western Regional Conference,
American Association of Geographers, Chicago, Illinois, 1979
Smith, Margot W. The Distribution of Medical Care in Central California: a Social and
Economic Analysis, Thesis, School of Public Health, University of California, Berkeley,
1977 - 1004 pages
Veneris, Y, 1984, Informational Revolution, Cybernetics and Urban Modelling, PhD Thesis,
University of Newcastle upon Tyne, UK.

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