1. Types of Services and Central Place Theory

2. Types of Services
Which sector of the economy generates more than 2/3 of GDP in developed countries?
Consumer Services
Provide services to individuals who desire them and can afford to pay for them
Examples?
Business Services
Facilitate the activities of other businesses
Professional, Financial and Transportation and Information Services
Public Services
Provide security and protection for citizens and businesses
Most public service jobs are with the government

3. Geographical Dimensions of the Service Economy
New Influences on Location:
- Information technologies
- Less tied to energy sources
- Market accessibility is more relevant for some & less relevant for others because
of telecommunications
- Presence of Multinational Corporations
Sunbelt: southern region of the US stretching from the southeast to the southwest
- secondary industrial regions moving
into Atlanta, Phoenix
- high-tech industry

4. Central Place theory
Selecting the right location for a new shop is probably the single most important factor in the profitability of a consumer service
How far would you travel if you wanted…
Groceries?
Good Italian food?
A college/university?
A new car?
Professional sports team?
An amusement park?
An art museum?
An airport?
Would you travel farther to buy a new car or a week’s groceries?
Would you travel farther to see your family physician or a heart specialist?
Would you travel farther to go to elementary school or to go to high school?

5. What is the Urban Hierarchy and why is it created?
CENTRAL PLACE THEORY
What is the Urban Hierarchy and why is it created?
Explains relationships between cities & surrounding communities & how the most profitable location of a service can be identified
Based on demands for goods & services
Economic hubs = large cities
Central place – market center for the exchange of goods & services by people attracted from the surrounding area
Market Area/Hinterland – the area surrounding a service from which customers are attracted
Range – maximum distance people are willing to travel to use a service
Threshold – minimum number of people needed to support the service

6. Using hexagons
Market areas across a developed country would be a series of hexagons of various sizes

7. Central Place Theory Market areas are arranged in a regular pattern
Fewer large settlements that are farther apart from each other than small settlements
Neighborhoods within large settlements provide services that have small thresholds and ranges

8. How do you see Central Place Theory in Illinois?

9. In developed countries, geographers observe that ranking settlements from largest to smallest in population produces a regular pattern
Rank-size rule – the country’s nth largest settlement is 1/n the population of the largest settlement
1= 10,000,000
2= 5,000,000
3= 3,333,333
4= 2,500,000
Are we creating an urban hierarchy?
RANK-SIZE RULE

11. Where is the Urban Hierarchy?

12. Primate City
Countries that do not follow the rank-size rule may follow the primate city rule
The largest settlement has more than twice as many people as the second-ranking settlement
Largest city - primate city
Mexico City – primate city
Guadalajara - 2nd largest country, 5 times smaller than Mexico City
Rank-size rule indicates that society is sufficiently wealthy to justify the provision of goods and services to consumers throughout the country
Absence of rule indicates a hardship for people who must travel long distances to reach an urban settlement with shops and services

13. Primate City v. Rank Size?
Primate Rule: Largest city has more than 2x next largest (London = 8mil but Birmingham = 2 mil)

14. Central place theory activity
Draw the market areas around each of the McDonald’s
Discuss and answer the following questions with your group:
Are the market areas the same size?
Are there concentrations of populations in some areas? Are the thresholds the same? Would concentrations of college students/apartment complexes influence the locations? Would the locations of businesses with large work forces influence the range?
If the community had a large elderly population would that change the threshold therefore influencing the range for each restaurant?
Are there “gaps”? Where would people go if they were not in one of the market areas?
Where would the next McDonald’s be built?
Do the transportation routes influence where people would stop?
What other factors might influence where people would stop?