CENTRAL PLACE THEORY - Commercial activities: the single most important economic function of most cities.

- Cities exist economically to serve the requirements of other areas, thru its secondary and tertiary economic activities, aside from the requirements of the city itself. - The Classical Model of Central Place Theory - Formulated by Walter Christaller in 1933, in his pioneering work Central Places in Southern Germany. - Christaller maintains that there is an overall ordering theory that explained the distribution of urban centers, or Central Places, as well as their size and number in a given region. - Urban places are termed Central Places because of their natural tendency to be located centrally to their trading area. Central places are viewed as settlements that function entirely as Market Centers for their surrounding areas, based on their secondary and tertiary economic activities. - The theory is anchored on the view that ... The crystallization of mass around a nucleus is ... an elementary form of order of things which belongs together - a centralistic order. - A central place serves as the center of a region. Larger central places serve larger regions because they are more centrally located and more accessible to its region. Thus, the importance of a central place is directly related to its centrality, or the relative importance of a place with regard to the region surrounding it. - Conceptual Elements of the theory: 1. Ranking/ Order of Central Places - Higher-order Central Places: larger number of central functions; bigger market area. - Lower-order Central Places: lesser number of central functions; smaller market area. 2. Ranking / Order of Goods and Services - Low-order goods/ services: those for everyday use (convenience stores, sari-sari stores) - Medium-order goods/ services: those needed frequently but not everyday (drugstores, banks, barber shops) - High-order goods/ services: those needed occasionally (furniture shop, legal or medical services) The higher the order of a good/ service, the higher the order of the central place that will economically support that good/ service. 3. Range of a Good the farthest distance consumers are willing to travel for a particular good or service offered at a central place. - The lower the order of a good/ service, the lesser the distance willing to be travelled by a consumer. - The higher the order of a good/ service, the greater the distance the consumer is willing to travel. - Thus, lower order goods/ services are found in every central place, whether large or small. - Higher order goods/ services are found only in the higher order central places to which the consumers are willing to travel greater distances.

-24. Threshold: The minimum level of sales or profit for an economic activity to exist. - Threshold size varies directly with level of centrality required by an economic activity. - Goods/ services requiring higher level of sales/ profit must locate in central places with higher order of centrality - or higher order central places. - In contrast, lower order goods/ services are ubiquitous - found in every central place as they do not need higher level of centrality to realize profit. - Christallers Hexagonal Trade Areas - 2 Basic assumptions of theory: 1. Isotropic plain: no physical barriers; movement is equally possible in all directions. 2. Rationality of consumers: consumers behave strictly on economic motivation and will travel to the nearest place offering the desired good/ service to achieve distance minimization. - Circular Trade Areas: Limitations 1. Some areas will be left unserved by any central place. 2. If circular trade areas are made to overlap in order to cover all areas, there will be duplication between central places. 3. But with distance minimization by consumers, the overlaps will be split between central places and thus, the resulting hexagonal trade area pattern, with each center surrounded by 6 other central places of the same level.

-3- Central Place System - With the theorys geometric arrangement of central places, under the given assumptions, there would emerge a system of central places bound by interrelated principles. - These interrelationships are between: - the kind of functions found in a central place and the size of the size of the central place. - the location of a central place vis-a-vis other central places in the system. - This pattern of central place system is based largely on Marketing principle. - Distortions in the Real World: - Transportation principle: central places will optimize their locations along major traffic routes. - Administrative principle: separation of areas into political/ administrative units. - Central Place Hierarchy - The central place system has a hierarchical geographical arrangement - with smaller central places linked to larger ones. - Such arrangement is also manifested in the population size of central places, their location and spacing, the nesting of trade areas, and composition of urban economic activities found in a central place. - Hierarchical Relationships/ Patterns 1. The larger the central place, the more varied will be the urban economic activities found. 2. The larger the central place, the greater the distance to another central place of comparable size or order. Central places at the top of the hierarchy are widely spaced, whereas smaller central places are much more closely located together. 3. Central places at the same level in the hierarchy offer the same mix of goods and services. They also offer the same set of goods and services found in the lower order central places, in addition to others. 4. The higher the level in the hierarchy, the fewer the number of central places at that level. Thus, there are numerous lower-order central places, several intermediate-order central places, and only a few high-order central places. - Validation of the Central Place Theory The study of August Losch on location theory of industrial and agricultural locations.