Central Places Theory (Market Principle)

Central Places Theory Market Principle

Central places theory is derived from the work of the German geographer Walter Christaller who investigated the urban system of Southern Germany during the 1930s. He was mainly looking for relationships between the size, the number, and the geographic distribution of cities. Although his work is mostly empirical, the theoretical part had the most impact on geography. His observations enabled the elaboration of this important theory of spatial structure and order, which is mandatory in the study of urban, economic, and transport geography.

Central places theory tries to explain the spatial distribution of a system of cities. This distribution is best understood by assuming a central place and its market area. A central place has the main function of supplying goods and services to the surrounding population. It specializes in selling various goods and services. The market area is the summation of consumers traveling to the central place, which is a part of a hierarchy with other central places. Its influence is a function of its market area, and the size of this market area will determine the nature of the spatial order. The above figure illustrates a system of central places according to the market principle with three orders of centers. In this case, the market area of a center of a higher order includes the equivalent of three market areas of centers of the next lower order.

As a model of the regional spatial structure, central place theory has been the subject of numerous criticisms. The basic hierarchical rules can be questioned, partly because the theory relates only to the service sector. Settlements may develop due to other factors, such as the availability of natural resources or as a gateway in the transport system. The Christaller model holds such factors constant, assuming an even plain and uniform distribution of natural resources. The theory also assumes a uniform distribution of the population. This rarely occurs in practice since factors such as the landscape, soil fertility, and climate vary and distort the spatial structure. Also, the dominance of a large metropolitan center may create a “shadow effect”, inhibiting the growth of smaller centers nearby. As such, central place theory cannot provide an all-inclusive general theory, and there is a need to introduce other theories to explain agglomerations in many areas.

Still, the central places theory is probably the most researched and well-known regional urban spatial structure model. It is a purely deductive theory of a highly simplified and abstract nature developed based on very idealized assumptions. It relates only to the service element of the regional economy, failing to explain distortions in the hierarchy caused by the location of the primary and manufacturing industry, which tends to group into clusters or agglomerations due to resource location. The theory is essentially static, explaining the existence of a regional spatial structure but failing to explain how that structure has evolved in the past and might change in the future. Still, it serves a useful role in identifying important concepts such as the interdependence of a city and its region, a hierarchy of functions and centers, and their market range and threshold populations.