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The Central Place Theory is a spatial theory in urban geography that seeks to explain the reasons behind the distribution patterns, size, and number of cities
It also attempts to provide a framework by which these areas can be studied, both for historical reasons and for the locational patterns of the areas today.
Origin
The theory was developed by the German geographer Walter Christaller in 1933, after he began to recognize the economic relations between cities and their areas of influence.
He primarily tested the theory in southern Germany and came to the conclusion that people gather in cities to share goods and ideas and that communities—or central places—exist purely for economic reasons.
Before testing his theory, however, Christaller had to first define the central place.
Maintaining his economic focus, he decided that the central place exists primarily to provide goods and services to the surrounding population.
The city is essentially a distribution center.
Christaller's assumptions
To focus on the economic aspects of his theory, Christaller created a set of assumptions.
In order to simplify the logic, he decided that the field in the areas he was studying would be flat, so that there would be no barriers to prevent the movement of people through it.
In addition, two assumptions were made about human behavior:
- Human beings will always buy goods from the nearest place that offers them.
- Whenever the demand for a particular good is high, it will be offered in close proximity to the population
- When demand falls, the availability of the good also decreases
Threshold It is an important concept in Christaller's study
It refers to the minimum number of people necessary for a centrally located business or activity to remain active and prosperous.
This led to the idea of low and high order goods.
Low-order goods are things that are replenished frequently, such as food and other routine household items.
Because people buy these items regularly, small businesses in small towns can survive because people frequently buy them at closer locations, instead of going to the central place of greater importance.
On the other hand, high-order goods are specialized items, such as cars, furniture, fine jewelry, and appliances that people buy less frequently.
Because they require a large threshold and people don't buy them regularly, many businesses that sell these items cannot survive in areas where the population is small.
Therefore, these businesses are often located in large cities that can serve a large population in the surrounding region.
Size and space
Within the central places system, there are five community sizes:
- Lugarejo
- Vila
- Small city
- town
- Regional Capital
A Lugarejo is the smallest place, a rural community that is too small to be considered a Village.
As Regional Capitals, which are not necessarily political capitals, they would include Ribeirão Preto or Montes Claros. These cities offer the highest possible level of goods and serve an enormous area of influence.
Geometry and ordering
Central seats serve evenly distributed consumers that are closer to the central location.
As the vertices connect, they form a series of hexagons.
Hexagons are ideal because they allow the triangles formed by the vertices of the central places to connect and represent the assumption that consumers will visit the nearest place that offers the goods they need.
In addition, the Central Place Theory has three orders:
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Market order
In this system, the market areas at a given level of the hierarchy of central places are three times larger than the next lowest.
The different levels then follow a progression of three, meaning that as you advance in the order of the seats, the number of the next level increases threefold. For example, when there are two cities, there would be six small towns, 18 villages, and 54 villages.
Shipping order
Where the areas in the hierarchy of central places are four times larger than the area in the next lowest order.
Administrative order
Which is the last system where the variance between the lowest and highest orders increases by a factor of seven.
Here, the highest-order area completely covers the lowest-order area, such as states, municipalities, and districts.
Secret Geomarketing Archives
In 1940, Walter Christaller joined the Nazi Party and put his science at the service of the Third Reich to “plan” the occupied parts of Poland.
This type of planning had painful and dark consequences, and the Central Place Theory was used to locate and plan concentration camps.
Thus, the Third Reich sent to their deaths people considered unwanted, placing them in “anti-places” intentionally distant from the center.
After the war, Christaller joined the Communist Party and “recycled” his theory to redesign administrative territories in the Federal Republic of Germany, a configuration that, in many ways, is still present.
Lösch
In 1954, German economist August Lösch modified Christaller's Central Place Theory because he believed it to be too rigid.
He thought that Christaller's model led to patterns where the distribution of assets and the accumulation of profits were based entirely on location.
Instead, he reversed his logic with the intention of maximizing consumer well-being and creating an ideal environment where the need to travel for any good was minimized and profits remained relatively the same regardless of where the goods are sold.
This is a logic closer to saturation models, ideal for neighborhood markets and franchises, which prefer to distribute themselves to be closer to their consumers and try to maximize profitability from a few points.
The Theory of Place and its relationship with Mapfry
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Christaller's work, with elements from Lösch, is in center of our methodology, being the main reference for the hexagonal grid view.
This makes it easier to:
- Identify ideal locations for the installation of new outlets, considering the population threshold necessary to sustain low or high order businesses.
- Understand what areas are served, by which urban centers, and how this affects the expansion strategy.
- Logistics and distribution planning optimizing routes and distribution locations based on the hierarchy of central places.
For example, a retail chain can use Mapfry to identify cities that act as regional capitals and assess the feasibility of opening high-end stores that sell high-end goods.
Information from Market Segmentation are profoundly influenced by the Central Place Theory.
In addition to the above, with the changes in urban dynamics, Mapfry offers data that considers modern factors such as transportation infrastructure, online competition and population mobility, elements that were not present at the time of Christaller, but which are crucial for strategic planning today.
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