Ap human Geography Central Place Theory

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AP Human Geography

  • Central Place Theory

Central Place Theory

  • 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

  • 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

  • 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

  • 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

  • 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)


  • 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?

  • 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

  • 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.


  • 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

  • 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

  • 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, slums, environmental impact

Where are Business Services Distributed?

  • 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?

  • 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?

    • Combination of economic, political, cultural, & infrastructure factors are used to identify global cities
    • Economic factors: # of headquarters for multinational co., financial institutions, & law firms
    • Political factors: hosting headquarters for international org. & capitals of countries that play lead role in international events
    • Cultural factors: cultural institutions, media outlets, sports facilities, educational institutions
    • Infrastructural factors: major international airports, health care facilities, & advanced communication systems

Where are Business Services Distributed?

  • 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

  • Retail services w/ extensive market areas
  • Lg. # of wealthy ppl, so luxury & highly specialized products are especially likely to be sold there
  • Offer more plays, concerts, operas, night clubs, restaurants, bars, professional sporting events, libraries, museums, etc.
  • Leisure activities cluster in global cities b/c they require lg. thresholds and lg. ranges, & need for wealthy patrons
  • 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

  • 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

Privacy: bank secrecy laws can help individuals & businesses evade disclosure in their home countries

  • 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
  • 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

  • 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)

  • Includes insurance claims processing, payroll management, transcription work, & other clerical activities
  • Also as centers for responding to billing inquiries related to credit cards, shipments, claims, technical support for things like installation, operation, & repairs
  • High rent prices in downtown global cities has induced business services to move routine work to places in suburbs or nearby sm. Towns
  • Selected developing countries have attracted back offices for 2 main reasons:
    • Low wages and ability to speak English

Economic Base of Settlements:

  • 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:

  • 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:

    • Other examples
      • computer and data processing in Boston and San Jose
      • High-tech industries support services: Austin, Orlando, Raleigh-Durham
      • 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
    • 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

  • Some cities have higher % of talented individuals than others
    • 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:

  • 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
    • Ex. New England colonists & their focus around the Church

Services in rural settlements:

  • 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

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