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# Central Place Theory

## Geog 315: Lecture 8

Walter Christaller
&
August Losch
Translation from the original
1933 German was done by
He started to play with the
maps, connecting towns of the
same size with straight lines
until his maps were filled with
triangles.
These triangles appeared to
show some regularity in a
hexagonal pattern.

Introduction
Walter Christallers Central Place Theory developed in 1933 can be
seen as a groundbreaking theory that seeks to study geographical
space as that in which the locations of retail outlets or central places
may be mapped.
The theory was also an attempt to explain the nature, sites and
spacing of retail centres as central places to surrounding
populations. Note also contributions to market area analysis by
Gatrell A., (1983). Applebaum, (19) and Ghyoot (1992)
The theory relied on two concepts: threshold and range.
Every good service must have a range and a threshold. The size of
a market area is a function of its threshold and range, but has a
direct influence with its threshold (Rodrigue, 2003).

## What is a central place?

A central place is a settlement whose prime
function is the provision of goods and services to a
dispersed population around it or hinterland. It may
vary in size from a village to a primate city and
forms a link in a hierarchy.

## Its sphere of influence or urban field or hinterland is

the area that comes under its economic, social and
The size, order, spatial distribution and
interrelatedness of settlements within an area or
region are the key issues at the heart of the theory

## Threshold and Range

Range of a good or service
Maximum distance people are
willing to travel to obtain it.
It is dependent on the value of
the good, the distance, and the
frequency that the service is
needed.
It is the farthest distance
measured in time, cost &
convenience over which either a
customer would be prepared to
travel to obtain it or a supplier
travel to provide it.

## Threshold of a good or service

The minimum number of people
required to support it, ensuring
reasonable profit.
The more specialized the
service the greater the number
of people required to make it
viable.

ATM
Catchments
.

Finding the best new bank and ATM location for business expansion is a really
challenging task and it requires quite a huge sum of capital to get it moving.
Management, therefore, in a bid to feel secured that wherever they are moving to
has the ability to understand their concept and provide insight for strategic planning
A catchment area, among its various definitions, can be explained as the area and
population from which a city or individual service attracts visitors or customers
(www.wilkipedia.com, 2006)
A banks catchment area is the geographic area from which customers are willing
and able to engage its services and patronize their products. It is the geographical
area served by the bank
For a bank/ATM to be profitable in its operations, however, its market must have a
range higher than its threshold
This is one of the primary considerations in the planning of any service-delivery
organization.

## ATM Threshold and Range

The range is a function of
transport costs, time or
convenience

## If the patronage of an ATM

machine falls below the threshold
level, the ATM will operate below
capacity and thus likely to be at a
loss.
However, with an increase in the
patronage of a cash machine
above the minimum, it will operate
at full capacity or even beyond.
Profits for this machine will
competition from others.

## Figure 3: Market Threshold and Range

SOURCE: Rodrigue, 2006

## The frequency of use of the

machine is important in assessing
the extent of market threshold,
which is often linked to the level of
income and easy accessibility to
and from the machine.

## Threshold and Range (Contd.)

Customers travel in from both within the threshold and range to the ATM.
However, in theory, beyond the range, at point 3 in Figure 3 above, most
customers should be unwilling to patronise the ATM services.

Different thresholds exist depending on the types of services the ATM provides,
its reliability, availability of other ATMs nearby.

A threshold may be as low as 250 persons for a banks ATM and therefore
various off-site locations at places of higher concentrations whereas another
banks ATM might have about 1500 persons for its threshold population because
of fewer locations usually at the branch sites.

If the patronage of a machine falls below the threshold level, the ATM will
operate below capacity and thus likely to be at a loss. However, with an increase
in the patronage of a cash machine above the minimum, it will operate at full
capacity or even beyond. Profits for this machine will increase leading to
increased competition from others.

## The frequency of use of the machine is important in assessing the extent of

market threshold, which is often linked to the level of income and easy
accessibility to and from the machine.

## There is an unbounded flat land so that transport was equally

easy and cheap. Transport cost is therefore proportional to the
distance from the central place using the only means of
transport, donkey cart
Population was evenly distributed across the plain
Goods and services are obtained from the nearest central place
only
Resources are evenly distributed across the plain
similar demands
Some central places offered only low-order goods with small
sphere of influence while others offered higher-order goods
with larger spheres of influence
No excess profit would be made by any one central place, as
each locate as far as possible from a rival to maximize profits.
He also assumed free market competition in that both supplier
and customer would make decisions entirely on economic
grounds.

## The Central Place Hierarchy

Within any region the hierarchy of central places can
be established by classifying each central place
according to the highest order good or service it
supplies e.g. University, SHS, JSS, Creche, etc.
At the apex of the hierarchy there will be the largest
central place in a region with its catchments area
large enough to support more than one outlet for all
the orders of goods and services. Below this leading
central place the hierarchy progressively descends to
the lowest order.
Empirically there may not only be regularity in the
size and order of places and the number of places
found at each level of the hierarchy, but also
regularity of the spatial distribution of central places
for any one level and between different orders of
central places

## Hierarchical spatial arrangement and

nesting of central places - Hexagons

## Minimizes the number

of settlements serving
an area by having each
at the meeting point of
three hexagons:
K3 = 1/3 x 6 + 1 = 3

## The first (a in the figure) minimizes the number of settlements

serving an area by having each at the meeting point of three
hexagons. This is his k = 3 (or marketing principle) model, in
which the number of settlements at each level of the hierarchy
below the second is three times the number at the next highest.
(Thus, with one at the highest, seventh, order, the numbers are
1, 2, 6, 18, 54, 162, 486.) The figure (a) illustrates this
arrangement with a three-level hierarchy only.

## K=4 or Transportation Principle

Minimizes the
needed to join all
central places.
K4 = 1/2 x 6 + 1 = 4

## In the k = 4 or transport principle, the goal is to minimize the

places. As shown in (b), each settlement is centrally located on
each side of a hexagon, at the boundary of two rather than
three hinterlands. The number of settlements is thus greater
than in the k = 3 model (in the ratio 1,2,8,32, 128,512,2048).

## Each lower order

hinterland is nested
exclusively within
that of a single
higher-order central
place only
K7 = 6 x 1 + 1 = 7

## In the k = 7 or administrative principle, (fig. c ) each lower order

hinterland nested exclusively within that of a single higher-order
central place only - producing a sequence of 1, 6, 42, 294,
2058, 14,406, and 100,842 settlements.

Limitations/Critique of the
Central Place Theory
Change in demand pattern of goods and services because of
affluence, changes in taste and preferences and greater
mobility enabling people to travel further to do their shopping
and obtain other services
Technological innovation and progress has also brought
changes in the ways provision of goods and services are
organised and located

## Increased government intervention through planning measures

and other legislation has also interfered in the operation of the
market forces which help to shape the central place system
The number, location, and spatial organisation of urban centres
is also influenced by the degree or localisation or
dispersal/uneven distribution of the resources of which the
urban centres directly or indirectly rely.
Rigidity

## Excellent Theoretical tool: Bunge (1962) sees

theory as useful for theoretical geography
e.g. Marketing Principle used to plan Oost
Polder in the Netherlands.

## Administrative Principle used `resolution` of the

`Eastern Question`: Christaller was made an
expert adviser in the `Reich Commissariat for the
Strengthening of Germany`(Freeman,1987).

CONCLUSION

## Despite recent changes the concept , it does

have some values as an analytical tool

## It can still help identify more clearly the role of

settlements as places of trade and exchange
and the extent to which this has influenced
the nature of the settlement pattern
developing in a region
It encourages us to think of individual
settlements in their wider context and to seek
above all some order in the spacing and
interrelatedness of settlements.

Sources
P J Ambrose 1969. Concepts in
Geography. Longman. Pages 12-133
Peter E. Lloyd and Peter Dicken. Location
in space: a theoretical approach to
economic geography. Harper and Row.
Pages 11-16

Trial questions
The central place theory provides a platform for
understanding the size, order, spatial distribution
and interrelatedness of settlements within an
area or region. Expatiate
Walter Christallers central place theory is built
on unrealistic assumptions. Provide a critique of
his theory
The range and threshold are the cardinal
principles of the central place theory. Discuss
how bakeries would mushroom over a given
region based on these principles