Land Use & Land Value

Theory by William Allonso(1960)

Presented By: Khushali Modi

Drashti Joshi
Dwip Lakhia
Land use
• Land use” is the term used to describe the human use of land.
• It represents the economic and cultural activities
• agricultural, residential, industrial, mining, and recreational uses2 that are practiced at a given
place. 

Land value
• Land value can be defined as the monetary cost of the land.
• It can be the cost of undeveloped land or a built property, but land value is primarily
associated with a vacant plot.
• When discussing the importance of a built structure the term “property value” is more
appropriate.
LAND USE & LAND VALUE THEORY BY
WILLIAM ALLONSO(1960)
HISTORY
• First theoreticians of bid rent effects was DAVID
RICARDO
• later developed by J. H. VON THÜNEN, who
combined it with the notion of transport costs.
• This model, introduced by WILLIAM ALONSO, was
inspired by von Thünen's model

BID RENT THEORY

• The bid rent theory is a GEOGRAPHICAL ECONOMIC THEORY that refers to how the PRICE AND DEMAND for real estate
change as the distance from the central business district (CBD) increases.
• This is based upon the idea that retail establishments wish to maximize their profitability, so they are much more willing to pay
more for land close to the CBD and less for land further away from this area.
• This theory is based upon the reasoning that the more accessible an area (i.e., the greater concentration of customers), the

more PROFITABLE.
RURAL URBAN
FACTORS AFFECTING LAND VALUE
1) PHYSICAL ATTRIBUTES

2) ACCESSIBILITY TO ECONOMIC ACTIVITIES 

3) NEIGHBOURHOOD AMENITIES 

4) PRESENT AND FUTURE LAND USE 

5) DEMAND AND SUPPLY FUNCTION 

6) LOCATION AND TRANSPORT LINKAGES

SOURCES:
https://planningtank.com/settlement-geography/bid-rent-theory
https://www.townandcountryplanninginfo.com/2020/08/land-use-and-land-value-theory-of.html
https://www.youtube.com/watch?v=pK_D-hc193k