Details On Von Thunen Model

ADVANCED EDUCATION PROGRAM
ECONOMIC GEOGRAPHY
THE VON THÜNEN MODEL
Nguyen Hoang Nam, PhD

Email: nguyenhoangnam275@gmail.com
Hanoi, 2019
Nguyen Hoang Nam The Von Thünen Model

Introduction
Assumptions and Concepts
The model and some modified conditions
The follow-ups
Introduction
The Von Thünen model of agricultural

land use was created by farmer and
amateur economist J.H. Von Thünen of
Germany. He believed farmers were
“economic men”
This model was created in 1826,

before industrialization
Johann Heinrich von
Thünen (1783-1850)

Introduction
The follow-ups
Introduction
Von Thünen Model
→ Explain the importance of proximity to market in
the choice of crops on commercial farms (the
agricultural landuse at a given location)
→ Analyse geographical factors (e.g. distance) from
an economics perspective
Spartial distribution
→ illustrate the balance between land costs and
transportation costs

Introduction
Assumptions and Concepts Explicit assumptions
The model and some modified conditions Implicit assumptions
The follow-ups
Assumptions
❑ Explicit assumptions
1. An isolated state
→ self sufficient and
has no external influences
2. Centrally located market
→ the sole urban market
3. Isotropic plain
→ production and transport costs were the same everywhere
4. Uniform transportation and transport costs
→Only one form of transport (e.g. wagon, oxcart)
→No roads, products are transported across land, directly to the market
→Increase distance, increase transport cost
5. Farmers are economic men and aim at maximizing profits
6. Same market price

Introduction
Assumptions and Concepts Explicit assumptions
The model and some modified conditions Implicit assumptions
The follow-ups
Assumptions
❑ Implicit assumptions
1. An isolated state
2. Land use competition under a capitalistic economy
3. Economic rent is the determining factor
4. Productivity could be raised
5. Steepness of an economic rent curves are governed by
the degree of perishability of farm produce and the
relative ease of transporting
6. Growing of temperate area crops
7. No catastrophic event
8. No chance factor
9. All parties are price-takers under perfect competition
Introduction
The follow-ups
Concepts
❑ Economic rent
Net return = Market price – Production cost – Transport cost
Where: Farmers got the same price (revenue) for their crops
Production cost = constant
Transport cost increase with distance
→ Net return decreases with increasing distance from the market

Introduction
The follow-ups
Concepts
❑ Location rent
LR = Y(m-c-td)
Where: LR: Location rent (land rent)
Y: Yields per unit of land
m: Market price per unit
c: Production costs per unit
t: Transportation costs per unit
d: distance from the market
→ Different crops have different location rent distribution patterns (bit rent curves)
→ Different crops compete with each other’s farmland
→ Concentric land use pattern was formed

Review Box 1.1
of the Textbook

Introduction
The follow-ups
Concepts
❑ Distance decay mechanism
→ Locational rent decreasing with increasing distance from market

Introduction
The follow-ups
The model (idealized model)

❑ Intensity Theory
Land use intensity declines with distance from the market.
→ More intensive farming activities tend to locate near the market
→ Less intensive farming activities tend to locate far away from the
market
The Thünen rings

Introduction
The follow-ups
The model
❑ Crop Theory
Crops with the highest economic rent will be grown.
This concept applies to any location.
❑ Free cash cropping (Market Gardening)

Horticulture (vegetables and fruit) and dairying
Perishable → as close as possible to market
▪ Low speed of transport
▪ No refrigeration
▪ Require milk and vegetable in city + price are high →higher
economic rent
Intensive labour input, multi-cropping, heavy fertilizing

Introduction
The follow-ups
The model
Y m c t di
a 60 2.000 1.000 200 ?
b 50 3.000 2.200 80 ?
c 100 1.500 1.200 20 ?
d 50 2.000 1.600 50 ?
Ra A
Rent Stock farming (Maximum radian ): 38km away
Question 1: Allocate crops to farm areas to
Rb maximize economic benefits
Rc Question 2: Identify di
Rd
b a
? ? distance
c

Introduction
The follow-ups
The model
60(2.000 − 1.000) − 60 • 200 x = 50(3.000 − 2.200) − 50 • 80 x
50(3.000 − 2.200) − 50 • 80 x = 100(1.500 − 1.200) − 100 • 20 x → D1 = 2,5; D2 = 5
100(1.500 − 1.200) − 100 • 20 x = 50(2.000 − 1.600) − 50 • 50 x
Y m c t di
a 60 2.000 1.000 200 5
b 50 3.000 2.200 80 10
c 100 1.500 1.200 20 15
d 50 2.000 1.600 50 8

Exercise
You are planning a land-use pattern of a farming area around a central market.
Farming is only profitable within a 13 km radius of the market. The details of some
farming options are as follows:
Options Yield Market price Production Transport costs
(ton per km2) ($ per ton) costs ($ per ton per km)
($ per ton)
Crop a 600 1,750 750 150
Crop b 500 1,750 950 80
Crop c 1000 1,600 1,320 20
Crop d 500 2,680 2,300 20
a) Using Von-Thunen model, design your land-use pattern (landscape) to maximize

your economic benefits?
b) Calculate the land-use patter? Are the land-use and rent map confirming your
initial expectation in question a?
c) Due to the advance of technology, transport costs of crop a and crop b reduce
by 50 percent. Do you plan all crops?
d) Illustrate your results on a graph of location rent and distance?
e) The Von Thünen model is of course an oversimplification of reality. Mention
two important limitations of this land-use model?
Nguyen Hoang Nam
Answer
Nguyen Hoang Nam

Introduction
The follow-ups
Some modified conditions

In 1826, Von Thunen noted followings:
1. Different places possess different physical factors
2. Large town (market) do often lie on a navigable river or canal
3. Production costs are nothing simple
4. Competing markets
5. In some cases, farmers do not maximize profits (In the real world
farmers are satisfiers instead of economic men)

Introduction
The follow-ups

And in fact,
6. Technology (e.g. fridges)
7. Change over time?
8. Emergence of specialized regions characterized by a particular
type of agricultural land use
9. Cooperative production?
10. Impacts of the government policy?
11. Freight rate in reality is not directly proportional to distance but is
step-shaped or being divided into different freight rate zones

Introduction
The follow-ups

Navigable river which lowers transport costs

Introduction
The follow-ups

Presence of a second market (e.g. a subsidiary town)

Introduction
The follow-ups

The isolated state Modified conditions
Central market
River
dairy & vegetables
forestry
Intensive crop rotation
Arable and pastures
Three-field crop rotation system
Extensive stock grazing

Introduction
The follow-ups

Not physical distance, but economic distance
e.g. A new railway connecting the city and its fringe area

Introduction
The follow-ups

Localized fertile soil or localized infertile soil/ hilly terrain

Introduction
The follow-ups

Information, farmers’ abilities to use the information, farmers’
preferences

Introduction
The follow-ups

Thus,

…applying von Thunen’s …von Thunen’s model with
basic assumptions Variations in climate factored
in--the north is colder than the
South.
United States Urban Centers
% Lacking Supermarket Access
Darker region
represents
50%
or more lack
convenience
of
supermarket
Market gardens are close to urban centers.
Introduction
The follow-ups
The follow-ups
Von Thünen model is the basis for the “bid rent” theory applied to
urban areas

Introduction
The follow-ups
The follow-ups
▪ The location rent curve (often regarded as bid-rent curve) (Alonso, 1960)– a
combination of land prices and distances among with the individual (or firm) is
indifferent. It describe the prices a household (or firm) would be willing to pay for
accessibility.
▪ The gradient is related to the marginal cost of distance from the center of the
activity.
▪ Retailing would have the highest marginal cost, housing the lowest.
Introduction
The follow-ups
The follow-ups


Details On Von Thunen Model

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ADVANCED EDUCATION PROGRAM

THE VON THÜNEN MODEL

Nguyen Hoang Nam, PhD

Nguyen Hoang Nam The Von Thünen Model

The Von Thünen model of agricultural

This model was created in 1826,

Nguyen Hoang Nam The Von Thünen Model

Nguyen Hoang Nam The Von Thünen Model

Nguyen Hoang Nam The Von Thünen Model

Nguyen Hoang Nam The Von Thünen Model

Nguyen Hoang Nam The Von Thünen Model

Nguyen Hoang Nam The Von Thünen Model

Nguyen Hoang Nam The Von Thünen Model

The model (idealized model)

Nguyen Hoang Nam The Von Thünen Model

❑ Free cash cropping (Market Gardening)

Nguyen Hoang Nam The Von Thünen Model

Nguyen Hoang Nam The Von Thünen Model

Nguyen Hoang Nam The Von Thünen Model

a) Using Von-Thunen model, design your land-use pattern (landscape) to maximize

Nguyen Hoang Nam

Some modified conditions

Nguyen Hoang Nam The Von Thünen Model

Some modified conditions

Nguyen Hoang Nam The Von Thünen Model

Some modified conditions

Nguyen Hoang Nam The Von Thünen Model

Some modified conditions

Nguyen Hoang Nam The Von Thünen Model

Some modified conditions

Intensive crop rotation

Arable and pastures

Three-field crop rotation system

Extensive stock grazing

Nguyen Hoang Nam The Von Thünen Model

Some modified conditions

Nguyen Hoang Nam The Von Thünen Model

Some modified conditions

Nguyen Hoang Nam The Von Thünen Model

Some modified conditions

Nguyen Hoang Nam The Von Thünen Model

Some modified conditions

Nguyen Hoang Nam The Von Thünen Model

Nguyen Hoang Nam The Von Thünen Model

Nguyen Hoang Nam The Von Thünen Model

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