Central place theory is a spatial theory in urban geography that attempts to explain the reasons behind the distribution patterns, size, and a number of cities and towns around the world. It also attempts to provide a framework by which those areas can be studied both for historical reasons and for the locational patterns of areas today.
The theory was first developed by the German geographer Walter Christaller in 1933 after he began to recognize the economic relationships between cities and their hinterlands (areas farther away). He mainly tested the theory in southern Germany and came to the conclusion that people gather together in cities to share goods and ideas and that communities—or central places—exist for purely economic reasons.
Before testing his theory, however, Christaller had to first define the central place. In keeping with his economic focus, he decided that the central place exists primarily to provide goods and services to its surrounding population. The city is, in essence, a distribution center.
To focus on the economic aspects of his theory, Christaller had to create a set of assumptions. He decided that the countryside in the areas he was studying would be flat, so no barriers would exist to impede people's movement across it. In addition, two assumptions were made about human behavior:
- Humans will always purchase goods from the closest place that offers them.
- Whenever the demand for a certain good is high, it will be offered in close proximity to the population. When demand drops, so too does the availability of the good.
In addition, the threshold is an important concept in Christaller's study. This is the minimum number of people needed for a central place business or activity to remain active and prosperous. This led to Christaller's idea of low- and high-order goods. Low-order goods are things that are replenished frequently such as food and other routine household items. Since people buy these items regularly, small businesses in small towns can survive because people will buy frequently at closer locations instead of going into the city.
High-order goods, by contrast, are specialized items such as automobiles, furniture, fine jewelry, and household appliances that people buy less often. Because they require a large threshold and people do not purchase them regularly, many businesses selling these items cannot survive in areas where the population is small. Therefore, these businesses often locate in big cities that can serve a large population in the surrounding hinterland.
Within the central place system, there are five sizes of communities:
- Hamlet
- Village
- Town
- City
- Regional capital
A hamlet is the smallest place, a rural community that is too small to be considered a village. Cape Dorset (population 1,200), located in Canada's Nunavut Territory is an example of a hamlet. Examples of regional capitals—which are not necessarily political capitals—would include Paris or Los Angeles. These cities provide the highest order of goods possible and serve a huge hinterland.
The central place is located at the vertexes (points) of equilateral triangles. Central places serve the evenly distributed consumers who are closest to the central place. As the vertexes connect, they form a series of hexagons—the traditional shape of many central place models. The hexagon is ideal because it allows the triangles formed by the central place vertexes to connect, and it represents the assumption that consumers will visit the closest place offering the goods they need.
In addition, central place theory has three orders or principles. The first is the marketing principle and is shown as K=3 (where K is a constant). In this system, market areas at a certain level of the central place hierarchy are three times larger than the next lowest one. The different levels then follow a progression of threes, meaning that as you move through the order of places, the number of the next level increases threefold. For example, when there are two cities, there would be six towns, 18 villages, and 54 hamlets.
There is also the transportation principle (K=4) where areas in the central place hierarchy are four times bigger than the area in the next lowest order. Finally, the administrative principle (K=7) is the last system where the variation between the lowest and highest orders increase by a factor of seven. Here, the highest order trade area completely covers that of the lowest order, meaning that the market serves a larger area.
In 1954, German economist August Losch modified Christaller's central place theory because he believed it was too rigid. He thought that Christaller's model led to patterns where the distribution of goods and the accumulation of profits were based entirely on location. He instead focused on maximizing consumer welfare and creating an ideal consumer landscape where the need to travel for any good was minimized, and profits remained relatively equal, regardless of the location where goods are sold.
Though Losch's central place theory looks at the ideal environment for the consumer, both his and Christaller's ideas are essential to studying the location of retail in urban areas today. Often, small hamlets in rural areas do act as the central place for various small settlements because they are where people travel to buy their everyday goods.
However, when they need to buy higher-value goods such as cars and computers, consumers who live in hamlets or villages have to travel into the larger town or city, which serves not only their small settlement but those around them as well. This model is shown all over the world, from rural areas of England to the U.S. Midwest or Alaska with the many small communities that are served by larger towns, cities, and regional capitals.
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Central places theory is derived from the work of the German geographer Walter Christaller who investigated the urban system of Southern Germany during the 1930s. He was mainly looking for relationships between the size, the number, and the geographic distribution of cities. Although his work is mostly empirical, the theoretical part had the most impact on geography. His observations enabled the elaboration of this important theory of spatial structure and order, mandatory in the study of urban, economic, and transport geography.
Central places theory tries to explain the spatial distribution of a system of cities. This distribution is best understood by assuming a central place and its market area. A central place has the main function of supplying goods and services to the surrounding population. It specializes in selling various goods and services. The market area is the summation of consumers traveling to the central place, which is a part of a hierarchy with other central places. Its influence is a function of its market area, and the size of this market area will determine the nature of the spatial order. The above figure illustrates a system of central places according to the market principle with three orders of centers. In this case, the market area of a center of higher-order includes the equivalent of three market areas of centers of the next lower order.
As a model of the regional spatial structure, central place theory has been the subject of numerous criticisms. The basic hierarchical rules can be questioned, partly because the theory relates only to the service sector. Settlements may develop due to other factors such as the availability of natural resources or as a gateway in the transport system. The Christaller model holds such factors constant, assuming an even plain and uniform distribution of natural resources. The theory also assumes a uniform distribution of the population. This rarely occurs in practice since factors such as the landscape, soil fertility, and climate vary and distort the spatial structure. Also, the dominance of a large metropolitan center may create a “shadow effect”, inhibiting the growth of smaller centers nearby. As such, central place theory cannot provide an all-inclusive general theory, and there is a need to introduce other theories to explain agglomerations in many areas.
Still, central place theory is probably the most researched and well-known regional urban spatial structure model. It is a purely deductive theory of a highly simplified and abstract nature developed based on very idealized assumptions. It relates only to the service element of the regional economy, failing to explain distortions in the hierarchy caused by the location of the primary and manufacturing industry, which tends to group into clusters or agglomerations due to resource location. The theory is essentially static, explaining the existence of a regional spatial structure but failing to explain how that structure has evolved in the past and might change in the future. Still, it serves a useful role in identifying important concepts such as the interdependence of a city and its region, a hierarchy of functions and centers, and their market range and threshold populations.