Von Thnens Agriculture

Location Theory

Johann Heinrich von Thnen

(24 June 1783 22 September 1850),
was a land owner , a prominent 19th
century economist and a native
ofMecklenburg-Strelitzin northern
Germany.
He contributed highly significant concepts
and techniques to economic theory like
his first volume of his treatise Isolated
State in 1826 which has the same
fundamental principles as that of Ricardo.
von Thunens Model of Agricultural Land
Use
-Cost of land vs. cost of transporting
goods in the market.
Sometimes mentioned to as a Father of
Location Theorists.

Von Thunens Model ofAgricultural

Land Use
First Location Theory
In his theory of "The Isolated State", he started
out from Adam Smith's idea of "economic man":
that the farmer is expected to maximize his profit
("economic rent") from his farmland.
Concentrating in optimal use of the land
surfaces and the transport costs, removal of
other factors results in a homogeneous and
isolated state: A concentric model
The Model is described as the
equation..
L = Y(P-C) YDF

Farm Lands

Transportatio
City
n

Contains Six Assumptions

1.
2.
3.
4.
5.
6.

There is only one market available, selfsufficient with no outside influence.

All farmers are market oriented, producing
goods for sale. (Not subsistence.)
The physical environment is uniform;
there are no rivers or mountains.
All points at equal distances from the
market have equal access to the market.
All farmers act to maximize profits.
The dietary preferences of the population
are those of Germanic Europeans.

Land rent
The main concept is land rent or land value, which will
decrease as one gets farther away from central markets.
Rent is highest in the closest proximity to urban markets.
Thus, agricultural products that have intensive land use, have
high transportation costs and were in great demand would be
located close to urban markets
Distance from the city
Preservation of food
Amount of space

(MAJOR CONCEPT)

Inference of Von Thunens Model to Continental United

States

Forest
Wheat

Dairy
Forest

Wheat
Beef Cattle
and Sheep

Corn and
Soybeans

Vegetables

Beef Cattle
and Sheep
Specialty
Crops

Cotton and
Tobacco

Dairy
Vegetables
Corn and
Soybeans
Cotton and
Tobacco

Assumptions
1. New York City the only market
2. Crops ranked by rent paying ability
3. No terrain or climatic variation

Assumptions
1. New York City the only market
2. Crops ranked by rent paying ability
3. No terrain variation
4. Climatic variation considered

Specialty
Crops

Weaknesses and criticism

The model was developed in an isolated state and did not take into
consideration differences in sites (local physical conditions). It can be
modified by relaxing some of the conditions set forth by Thunen:
differential transportation costs. Example: boats are the cheapest
mode of transportation.
variations in topography
soil fertility
changes in demand or price of the commodity