Alonso model

W. Alonso's (1964) explanation of urban land use and land values. It is grounded on the concept of bid rents (See bid-rent theory) whereby the urban land user seeks central locations, but is willing to accept a location further from the city centre if rents are lower in compensation. The use that can extract the greatest return from a site will be the successful bidder. To this basis, Alonso, in a study of housing, added the quantity of land required, and variations in the amount of disposable income used on land and transport costs on one hand, and on all goods and services on the other. If the amount of goods and services is held constant, the price of land should decrease with increasing distance from the centre. The well-off will choose to live at lower densities at the edge of the city; the poor remain in high density occupancy near the city centre. The quantity of land that may be bought should increase with distance from the centre, but commuting costs will rise with distance from the centre so that the quantity of wealth available for land will decrease. Each household represents a balance between land, goods, and accessibility to the workplace.

Alonso also explained that higher-income groups, who are less constrained than lower-income groups in their choice of residential location, may prefer the accessibility to the CBD offered by the inner city to the space, quiet, and cheaper land of the suburbs, so that gentrification may result.

The assumptions on which this theory rests range from all land being of equal quality to lack of planning constraints. This means that the theory is a long way from reality, although it does reflect some aspects of urban morphology.