AP Human Geography
Central Place Theory
Central Place Theory
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Based on the work of
Walter Christaller, a
German geographer
In 1933, Christaller wrote
his doctoral dissertation
in geography entitled,
The Central Places of
Southern Germany.
In it, he proposed CPT
Central Place Theory: Some
Basic ideas
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Central places are nodes for the distribution of
economic goods and services to surrounding
nonurban populations
Central places compete against each other; this
competition creates the regular pattern of
settlements
Each settlement has a market area, the region
from which customers are drawn.
Hexagons rather than circles are used to
indicate market areas.
Central Place Theory Cont’d
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Smaller settlements occur more frequently and
are closer together, while larger settlements
occur less frequently and are farther apart.
Small settlements provide goods and services
that have small thresholds and ranges; large
settlements provide goods and services that
have large thresholds & ranges.
The good or service provided in a central place
has an order (high or low) based on how
specialized it is.
Market Area
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The area surrounding a service from
which customers are attracted is the
market area or hinterland.
It is a good example of a nodal or
functional region- a region with a core,
where the characteristic is most intense.
Size of Market Area
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Range- the maximum distance people are
willing to drive to use a service
Threshold- the minimum number of people
needed to support the service (customer
base)
Assumptions
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No topographic barriers
No difference in soil fertility
Population & purchasing power evenly
distributed
People with similar lifestyles and incomes
Uniform transportation network
Purchase of goods & services at the
nearest center
What are the advantages of
central place theory?
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Does a reasonably good job of describing the
spatial pattern of urbanization. No economic
theory explains why there is a hierarchy of urban
centers.
Provides a description of the relationship
between a central place-higher order place and
its tributary areas-lower order places.
Does a good job of describing the location of
trade and service activity.
The Real World
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Physical barriers, resource distributions,
etc. create modifications of the spatial
pattern.
Some areas tend to confirm the model
Christaller stimulated urban and economic
geography in general and location theory
in particular.
Conclusions
Christaller’s conclusions:
1. Towns of the same size are evenly spaced
because they are in the center of liked-sized
market areas. Larger towns will be farther
apart than smaller towns b/cause their
market areas are larger.
2. Distribution of cities, towns, & villages in a
region is related to trade areas, pop. size,
and distance
Rank Size Rule
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Holds that in a model urban hierarchy, the pop
of a city or town will be inversely proportional to
its rank in the hierarchy
For example, if the largest city has 12 million
people, the 2nd largest = 6 million (1/2); 3rd
largest = 4 million (1/3);
Rank size rule does not apply to all countries,
esp. countries w/one dominant city, e.g., France,
England, Japan, Mexico, etc.
Primate City Rule
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According to primate city rule, the largest
settlement has more than twice as many people
as the second-ranking settlement.
Examples: Paris, France; London, United
Kingdom; Mexico City, Mexico, etc.
Pros-lg. market for goods/services/information,
compete on a global scale & attract foreign
investment, lg. threshold=better services,
transportation
Cons-unequal distribution of investments,
wealth, transportation & resources; brain drain,
Where are Business Services
Distributed?
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Cluster in urban settlements
Global or world cities have lg. #s of business services for
many reasons:
 Headquarters of lg. corporations are clustered in
global cities
 Lawyers, accountants, & other professionals cluster
there to provide advice to major corporations &
financial institutions
 Advertising agencies, marketing firms, etc. concerned
w/ style & fashion locate in global cities to help
corporations anticipate changes in taste & shape
those changes
Where are Business Services Distributed?
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Global cities are centers for finance & attract major
banks, insurance co., etc.
Global cities are divided up into 3 levels:
 Alpha, beta, gamma
 Ex. alpha++ city= NYC and London
alpha+ city= Chicago, Tokyo, Hong Kong
Where are Business Services Distributed?
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Combination of economic, political, cultural, & infrastructure
factors are used to identify global cities
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Economic factors: # of headquarters for multinational co.,
financial institutions, & law firms
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Political factors: hosting headquarters for international org. &
capitals of countries that play lead role in international
events
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Cultural factors: cultural institutions, media outlets, sports
facilities, educational institutions
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Infrastructural factors: major international airports, health
care facilities, & advanced communication systems
Where are Business Services Distributed?
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New forms of transportation & communication were expected to
reduce the need for clustering of services in lg. cities:
 Telegraph & telephone in 19th century and the computer in
the 20th century
 RR in 19th century & motor vehicle and airplane in 20th
century
 These new technologies have reinforced rather than
diminish the primacy of global cities
 Characteristics of global cities: tend to have busy harbors &
airports and lie at the junction of RR and highway networks
Consumer & Public Services in Global Cities
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Retail services w/ extensive market areas
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Lg. # of wealthy ppl, so luxury & highly specialized products are
especially likely to be sold there
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Offer more plays, concerts, operas, night clubs, restaurants,
bars, professional sporting events, libraries, museums, etc.
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Leisure activities cluster in global cities b/c they require lg.
thresholds and lg. ranges, & need for wealthy patrons
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Most are national capitals w/ gov’t and related services
 Ex. NYC is not but houses United Nations headquarters;
Brussels, Belgium center for European Union activities
Business Services in Developing Countries
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Developing countries usually specialize in 2 distinctive types of
business services: offshore financial services & back-office
functions
 These services are located here for reasons such as
supportive laws, weak regulations, & low wage workers
 Sm. Countries (islands/microstates) offer offshore financial
services. Off shore centers provide 2 important functions:
Taxes: taxes on income, profits, & capital gains are
typically low or non-existent
 Companies incorporated in an offshore center also have
tax-free status, regardless of the nationality of owner
 Companies are able to conceal their assets & countries
lose out on millions/billions of tax revenue
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Privacy: bank secrecy laws can help individuals & businesses
evade disclosure in their home countries
 Creditors cannot reach such assets in bankruptcy hearing
 Short statues of limitation protect offshore accounts from
long-term investigations
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The International Monetary Fund, UN, & Tax Justice Institute
identify the following places as offshore financial services
centers:
 Dependencies of the UK: Anguilla, Cayman Islands,
Montserrat, British Virgin Islands, Gibraltar off Spain
 Dependencies of other countries: Cook Island controlled by
New Zealand, Aruba & Curacao controlled by the
Netherlands, Hong Kong & Macau by China
 Independent countries: Barbados, Grenada, Turks & Caicos,
Samoa, Mauritius, Seychelles , Ireland, Liechtenstein, Costa
Rica, Lebanon, United Arab Emirates, etc.
Cayman Islands
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Several hundred banks w/ assets of more than
$1 trillion are legally based there
Most banks have only a handful of ppl, if any,
working in the Caymans
Crime to discuss confidential business learned
on the job in public
Offshore assets are not covered by lawsuits
originating in the U.S., so additional lawsuits
would have to be made & privacy laws can
shield individual/corporation from undesired
disclosures
Back Office Functions (business process
outsourcing or BPO)
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Includes insurance claims processing, payroll management,
transcription work, & other clerical activities
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Also as centers for responding to billing inquiries related to
credit cards, shipments, claims, technical support for things like
installation, operation, & repairs
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High rent prices in downtown global cities has induced business
services to move routine work to places in suburbs or nearby
sm. Towns
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Selected developing countries have attracted back offices for 2
main reasons:
 Low wages and ability to speak English
Economic Base of Settlements:
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Settlement’s distinctive economic structure derives from its
basic industries (export primarily to consumers outside
settlement)
Nonbasic industries: enterprises whose customers live in the
same community, essentially, consumer services
Community’s unique collection of basic industries defines its
economic base
Exportation of basic industries brings $ to local economy, thus
stimulating more nonbasic consumer services for the area
New basic industries attract new workers to the settlement
The settlement then attracts additional consumer services to
meet the needs of the new workers
New basic industries stimulates new nonbasic industries but not
visa-versa
Economic Base of Settlements:
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Basic industries can be computed by the % of the community’s
workers employed in different types of businesses
% of workers employed in a particular industry in a settlement is
then compared to the % of all workers in the country employed
in that industry
If % is much higher then it is a basic economic activity for that
settlement
Settlements can be classified by their basic activity such as:
 manufactured goods (steel, cars) located btw. Northern Ohio
& SE Wisconsin and Great Lakes
 nondurable manufactured goods (textiles, apparel, food,
chemicals, paper) in SE, especially the Carolinas
Economic Base of Settlements:
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Other examples
 computer and data processing in Boston and San Jose
 High-tech industries support services: Austin, Orlando, RaleighDurham
 Military activity support services: Albuquerque, Colorado Springs,
Knoxville, Norfolk
 Management-consulting: Washington D.C.
 Entertainment/Recreation: Atlantic City, Las Vegas, Reno
 Medical: Rochester, Minnesota
 Public Services: state capitals like Sacramento and Tallahassee,
Arlington for military bases
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North and Eastern states have expanded their business services more
rapidly
ex. Cleveland & Pittsburgh once relied on steel production but now
rely on health services such as hospitals, medical high-technology
Distribution of Talent
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Some cities have higher % of talented
individuals than others
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Ex. Raleigh-Durham, Washington D.C.,
Austin, Colorado Springs, Boston, San
Francisco, Seattle
Enticement of cultural rather than economic
reasons bring talent to these cities
Services in rural settlements:
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Rural settlements are either clustered or
dispersed
Clustered rural settlement includes homes,
barns, tool sheds, & other farm equipment plus
consumer services (religious structures, schools,
shops)
Usually has a commons areas
Villages or hamlets are clustered rural
settlements
Brings about a sense of community
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Ex. New England colonists & their focus around the
Church
Services in rural settlements:
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Dispersed rural settlements:
 More individual areas w/ lg. chunks of land
 Typical of Middle Atlantic colonies settled by
groups like the Germans, Dutch, Irish,
Swedish, etc.
 Dominates the American Midwest where land
was plentiful & cheap
 Enclosure movement in England is a good ex.
of dispersed rural settlements