1. Chapter 10 Cities and Urban Economies
Relation between urban growth and capitalist development
Central place theory (NOT IN TEXT)
Economic base model
Housing markets in urban areas
Gentrification processes, poverty
The development of global cities

2. Cities in Historical Perspective
Early cities: trading points for agriculture, as well as bureaucrats, priests, etc.
City-states – Greek, Roman
Revival in the renaissance
Boom along with the industrial revolution: manufacturing as a “city-forming” sector
The rise of colonial cities
The rise of corporate headquarter concentrations

3. Vance’s
Exogenic
And
Endogenic
Model of
City System
Development

4. Central Place Theory Wasp Nest Nearly Perfect Hexagonal Nests
Walter Christaller
Barnacle shells on a beach rock
Average 5.3 sides per barnacle

5. Simplifying Assumptions: The Isotropic Plain
The concept: equal properties in all directions:
Flat, no movement barriers
Transport costs proportional to distance
Equal Quality Environment
Population evenly spaced
Identical Income Levels, Tastes, Demands
Perfect Knowledge: consumers & producers
Producers seek to maximize profit
Scale economies exist in production

6. Demand and Supply Principles$ D S P S D
Q(t) Q
A model of expectations!

7. A Simple Market Model of Demand for Sausages
Price: $2/ pound
Transport cost: 10 cents/mile each way ($.20 round trip)
Budget: $8 each week for Sausage
Therefore, at the market where TC = 0, 4# each week can be purchased given this budget for sausages.
At 10 miles: $2 Transport cost (.1 /mile x 10 miles each way) this leaves $6 for Sausages, or 3# per week.
If travel rises to 40 miles, then travel costs are $8, then there is no income to use to purchase sausages. This is the RANGE of the good for this market price and demand quantity.

9. Basic Model, Continued
Now, let us assume that the costs of production are
$140,
and for the moment NOT variable with scale
(size of production (Q). This means that the
threshold for the example here is 20 miles of
market extent:
Distance: # customers Q*P Rev Total
Up to x 2 8 8
up to x
up to x
up to x

10. Demand Cone Principles
Quantity Demanded
Range
Zero
Distance
Distance

11. Threshold and Range Relationship
Situation:
Demand > Costs
Situation:
Demand < Costs
Threshold

12. Competition for Customers
Possibly maximum profit
Market area
Unserved customers
The figure suggests that sellers press towards each
other, creating hexagonal market areas and possibly
eliminating excess profits
? How would producers like to set their price? At the level
that maximizes profit, which is at a scale of output where
marginal revenues and marginal costs are equal.

13. Lösch’s Market Area Development Sequence

14. Alternative Spatial Market Areas

15. Spatial Competition
If producers behave as spatial monopolists, then circular market areas arise, with the range equal to the market area maximizing profit.
If producers behave competitively, they will pack together shrinking market area size until excess profit disappears.

16. Christaller’s Central Place Models
Marketing Principle
Transportation Principle
Administration Principle
Implications of each for transportation routes

17. Marketing Principle

18. Marketing Principle Transport routes are not straight between high
level centers
as they must
also serve
second level
centers (black
lines)

19. Marketing Principle - Order of Goods

20. Transportation Principle Transport routes are straight, passing
through second
order centers

21. Administrative
Principle

22. Lösch’s Ten Smallest Market Areas

23. Lösch’s Model

24. Lösch’s
System
Of Transport
Lines and
Centers
With
Activity-rich
And
Activity-poor
sectors

25. Fox & Kumar’s Square Market Areas

26. Central Place Systems: Evidence
Hierarchies? Are they out there?
Groups of functions vs. continuous spread by size?
Rank Size models as surrogates
Rank Stability over time
Do Consumers Travel as Expected?
Desire Line Analyses
Are Centers Spaced as we Expect?
Nearest-Neighbor Statistical Tests
Impact of Density of Settlements

29. Ideal Patterns of Functions
Discrete breaks •
• • •
# of functions
• • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • • • •
Largest
Rank Size of Place
Smallest

30. Ideal Patterns of Functions versus continuous pattern of functions
Discrete breaks •
• • •
Actual data show a pattern
in between these alternatives
# of functions
• • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • • • •
Largest
Rank Size of Place
Smallest

31. Lösch’s Test of Spacing of Central Places in Iowa
Region Theoretical # Actual# Theoretical Actual
Size of of Spacing Spacing
(Order) Settlements Settlements or
or ?

32. Two Examples of Central Place Hierarchies
S.W. Ontario
# Centers # Functions Population
,224
,190
Southwest Iowa
less than less than 150
over

33. Isard’s Model With Varying Density

34. Seyfried’s Urban Hierarchy

35. Impact of Density on Trade Area Size

36. Rank-Size Relationships
In many urban systems where population and rank exhibit a relatively continuous distribution, the rank-size model predicts well:
Pr = P1 / rq where q tends towards 1.
Example: If P1 = 100,000, q = 1, and rank = 25,
Then P25 = 100,000/25 = 4,000
U.S
U.S. Cities
Exception: Primate City conditions

37. Rank Relations Over Time

38. Rank Position Top 20 U.S. Metro Areas

39. Movement of Consumers to Central Places
Desire lines:
Beyers hardware lawnmower data
Overlapping trade areas – Pacific
Northwest data for high order services
- Eastern Montana
- Southern Idaho
- Southwest Oregon

40. Source: Preston, The Structure of Central Place Systems

44. Beyers Hardware Lawnmower Sales Patterns

45. Beyers Hardware Lawnmower Sales Patterns

47. Spacing of Urban Centers
Tests using “nearest neighbor” statistic:
Index = observed average distance
expected average distance
Expected distance is for a random distribution
Index = 1 for a random distribution
Index = 0 if all places are clustered
Index = 2.15 for a perfect hexagonal pattern
Table 1.6: Mixed results!
Figure 1.23: Impact of settlement density

48. Uniform Hexagonal R = 2.15
Uniform Square R = 2.0
Random R=1.0
Clustered R=0.0

49. Spatial Pattern of Settlements

52. Central Place Theory & Evidence: Additional Issues
PSRC Vision 2020
Periodic Markets
Movement up and down the hierarchy
Changes in the scope of retailers:
Walmart, Nordstrom; 7-Eleven
Minimarts = gas station + food
The Internet: Homegrocer.com; Amazon.com

53. Periodic Market Concept
Individual
Markets $ AC
AR(2)
AR(1) Q
AR(1) is revenue from a single market
AR(2) is revenue combined by traveling to all three markets

54. 5 Day Periodic Market System

56. An Itinerant Merchant in Penedo, Portugal

57. Skinner’s
Model of
Periodic
Markets
In China