von Thünen models

J. H. von Thünen had two basic models. Both were located in an isotropic plain where there was one market—the city—for surplus agricultural production. One form of transport was available and transport costs increased in direct proportion to distance. No external trade took place, and farmers acted as economic men. All farmers received the same price for a particular crop at any one time.

The first model postulates that the intensity of production of a particular crop declines with distance from the market since transport costs increase with distance from the market and the locational rent is therefore lower. Intensive farming—which demands costly inputs—is only profitable where locational rent is high to cover costs, so intensive farming takes place only near the city.

Von Thünen's second model is concerned with land use patterns. Transport costs vary with the bulkiness and perishability of the product. Product A is costly to transport but has a high market price and is therefore farmed near the city. Product B sells for less but has lower transport costs. At a certain distance, B becomes more profitable than A because of its lower transport costs. Eventually, product C, with still lower transport costs, becomes the most profitable product. The changing pattern of the most profitable produce is therefore seen as a series of land use rings around the city. This phenomenon may be illustrated by a graph showing the varying locational rent of three products, the most profitable product at each point, and the land use pattern which results.

von Thünen model