2 – Location theories: the Von Thunen Model

This section deals with the use of models in Economic Geography and particularly Location Theories.

Models are adapted to different kinds of activities. 

The starting points are similar and goes from simplified models to more complex ones.

Common Hypothesis – generally a common starting point for the different models:

1. Homogeneity and isotropy of space
   (no differences in morphology of space; no transport asymmetries; ecc.)
2. Fertility of land is homogeneous – if a rent exists,  it depends on transport costs based on distance
   
3. Perfect competition (same price throughout the market; freedom of movements of factors of production; no transport costs)
   

The father of location theory is renown as John Heinrich Von Thunen (Jever, Oldemburg – East Germany 1783 - 1850). In 1826 he wrote ‘The isolated state’ in which he stated that differences in the cost of producing agricultural products depended on the differences in land location and therefore on the distance of the producing areas to the market.

Von Thunen’s theory opposed David Ricardo’s one in which differences in the cost of producing agricultural products result from utilization of land of different quality.

Von Thunen circular model was then used later as the basis for an exam on urban rent in Urban Geography