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Central place theory is a geographical theory that seeks to explain the number, size and location of human settlements in an urban system. The theory was created by the Germanmarker geographer Walter Christaller, who asserted that settlements simply functioned as 'central places' providing services to surrounding areas.

Building the theory

To develop the theory, Christaller made the following simplifying assumptions:
  • an unbounded isotropic (all flat), homogeneous, unbounded limitless surface (abstract space)
  • an evenly distributed population
  • all settlements are equidistant and exist in a triangular lattuce pattern
  • evenly distributed resources
  • distance decay mechanism
  • perfect competition and all sellers are economic men maximizing their profits
  • consumers are of the same income level and same shopping behaviour
  • all consumers have a similar purchasing power and demand for goods and services
  • Consumers visit the nearest central places that provide the function which they demand.They minimize the distance to be travelled
  • no provider of goods or services is able to earn excess profit(each supplier has a monopoly over a hinterland)
Therefore the trade areas of these central places who provide a particular good or service must all be of equal size
  • there is only one type of transport and this would be equally easy in all directions
  • transport cost is proportional to distance traveled in example, the longer the distance traveled, the higher the transport cost

The theory then relied on two concepts: threshold and range.
  • Threshold is the minimum market (population or income) needed to bring about the selling of a particular good or service.
  • Range is the maximum distance consumers are prepared to travel to acquire goods - at some point the cost or inconvenience will outweigh the need for the good.

The result of these consumer preferences is that a system of centers of various sizes will emerge. Each center will supply particular types of goods forming levels of hierarchy. In the functional hierarchies, generalizations can be made regarding the spacing, size and function of settlements.

  1. The larger the settlements are in size, the fewer in number they will be, i.e. there are many small villages, but few large cities.
  2. The larger the settlements grow in size, the greater the distance between them, i.e. villages are usually found close together, while cities are spaced much further apart.
  3. As a settlement increases in size, the range and number of its functions will increase .
  4. As a settlement increases in size, the number of higher-order services will also increase, i.e. a greater degree of specialization occurs in the services.

The higher the order of the goods and services (more durable, valuable and variable), the larger the range of the goods and services, the longer the distance people are willing to travel to acquire them.

Examples for low order goods and services are: newspaper stalls, groceries, bakeries and post offices.They are supported by a smaller threshold population and demand.Examples for high order goods and services are: jewellery, large shopping arcades and malls.They are supported by a much larger threshold population and demand.

Predictions of the theory

From this he deduced that settlements would tend to form in a triangular/hexagonal lattice, this being the most efficient pattern to serve areas without any overlap.

In the orderly arrangement of an urban hierarchy, seven different principal orders of settlement have been identified by Christaller, providing different groups of goods and services. Settlement are regularly spaced - equidistant spacing between same order centers, with larger centers farther apart than smaller centers. Settlements have hexagonal market areas, and are most efficient in number and functions.

The different layouts predicted by Christaller have K-values which show how much the Sphere of Influence of the central places takes in — the central place itself counts as 1 and each portion of a satellite counts as its portion:

K = 3 Marketing principle
K = 3 Principle
According to the marketing principle K = 3, the market area of a higher-order place includes a third of the market area of each of the following size neighbouring lower-order places and each is located at the corner of a hexagon around the high-order settlement. Each high-order settlement gets 1/3 of each satellite settlement, thus K = 1 + 6×1/3 = 3.

However, although in this K = 3 marketing network the distance traveled is minimized, the transport network is not the most efficient, because the important transport links between the larger places do not pass through intermediate places.

K = 4 Transport principle
K = 4 Principle
According to K = 4 transport principle, the market area of a higher-order place includes a half of the market area of each of the six neighbouring lower-order places, as they are located on the edges of hexagons around the high-order settlements. This generates a hierarchy of central places which results in the most efficient transport network. There are maximum central places possible located on the main transport routes connecting the higher order center..

K = 7 Administrative principle
K = 7 Principle
According to K = 7 administrative principle (or political-social principle), settlements are nested according to sevens. The market areas of the smaller settlements are completely enclosed within the market area of the larger settlement. Since tributary areas cannot be split administratively, they must be allocated exclusively to a single higher-order place. Efficient administration is the control principle in this hierarchy.


The validity of the central place theory may vary with local factors, such as climate, topography, history of development, technological improvement and personal preference of consumers and suppliers.

Economic status of consumers in an area is also important. Consumers of higher economic status tend to be more mobile and therefore bypass centers providing only lower order goods. The application of central place theory must be tempered by an awareness of such factors when planning shopping center space location.

Purchasing power and density affect the spacing of centers and hierarchical arrangements. Sufficient densities will allow, for example, a grocery store, a lower order function, to survive in an isolated location.

Factors shaping the extent of market areas:
  • Land use: industrial areas can provide little in the way of a consuming population
  • Poor accessibility: this can limit the extent of a center's market area
  • Competition: this limits the extent of market areas in all directions
  • Technology: high mobility afforded by the automobile allows overlapping of market areas

Market area studies provide another technique for using central place theory as a retail location planning tool. The hierarchy of shopping centers has been widely used in the planning of "new towns". In this new town, the hierarchy of business centers is evident. One main shopping center provides mostly durable goods (higher order); district and local shopping centers supply, increasingly, convenience (lower order) goods. These centers provided for in the new town plan are not free from outside competition. The impacts of surrounding existing centers on the new town centers cannot be ignored.


The newly reclaimed polders of the Netherlandsmarker provide an isotropic plane on which settlements have developed and in certain areas 6 small towns can be seen surrounding a larger town, especially in the Noord-Oostpolder and Flevoland.The Fens of East Angliamarker in the UK also provide a large expanse of flat land with no natural barriers to settlement development. Cambridgemarker is a good example of a K=4 Transport Model Central Place, although it is surrounded by 7, rather than 6, settlements.Each satellite is 10-15 miles from Cambridge and each lies on a major road leading out of Cambridge:
  • Ely - A10 north
  • Newmarket - A1303 (now bypassed by A14/A11) northeast
  • Haverhill - A1307 southeast
  • Saffron Walden - A1301 south
  • Royston - A10 southwest
  • St Neots - A428 west
  • St Ives - A14 northwest

As all of the satellite settlements are on transport links, this is a good example of a K=4 CPT model (although in this case it is K=4.5 due to 7 rather than 6 settlements).


The Central Place Theory has been criticized for being static; it does not incorporate the temporal aspect in the development of central places. Furthermore, the theory holds up well when it comes to agricultural areas, but not industrial or postindustrial areas due to their diversified nature of various services or their varied distribution of natural resources.

Newer developments

Newer theoretical developments have shown that it is possible to overcome the static aspect of CPT. Veneris (1984) developed a theoretical model which starts with (a) a system of evenly distributed ("medieval") towns; (b) new economic activities are located in some towns thus causing differentiation and evolution into an hierarchical ("industrial")city system; (c) further differentiation leads into a post-hierarchical ("postindustrial") city system.This evolution can be modelled by means of the three major CPT theories: stage (a) is a system of von Thunen "isolated states"; stage (b) is a Christallerian hierarchical system; stage (c) is a Loschian post-hierarchical system. Furthermore, stage (b) corresponds to Chris Alexander's "tree" city, while (c) is similar to his "lattice" system (following his dictum "the city is not a tree").

Making Central Place Theory operational

CPT is often criticized as being "unrealistic". However, several studies show that it can simulate existing urban systems.A most important issue is that Christaller's original formulation is inconsistent in several ways. These inconsistencies become apparent if we try to make CPT "operational", that is if we try to derive numerical data out of the theoretical shemata. These problems have been identified for the first time by Veneris (1984) and subsequently by Openshaw and Veneris (2003), who provided also theoretically sound and consistent solutions, based on a K=3, 37-centre CP system:

1. Closure problem. Christaller's original scheme implies an infinite landscape. Although each market has finite size, the total system has no boundaries to it. Neither Christaller, nor the related literature provide any guidance as to how the system can be "contained". Openshaw and Veneris (2003) identified three different types of closure, namely (a) isolated state, (b) territorial closure and (c) functional closure. Each closure type implies different population patterns.

2. Generting trips. Following the basic Christallerian logic and the closure types identified, Openshaw and Veneris (2003) calculate trip patterns between the 37 centres.

3. Calculating inter- and intra-zonal costs/distances. Christaller assumed freedom of movement in all directions, which would imply "airline" distances between centres. At the same time, he provided specific road networks for the CP system, which do not allow for airline distances. This is a major flaw which neither Christaller, nor related literature have identified. Openshaw and Veneris (2003) calculate costs/distances which are consistent with the Christallerian principles.

Central Place Theory and Spatial Interaction Models

It was once thought that central place theory is not compatible with spatial interaction models (SIM). It is paradoxical however that some times towns or shopping centres are planned with CPT, and subsequently evaluated with SIM.Openshaw and Veneris (2003) succeeded in linking these two major regional theories in a clear and theoretically consistent way: using the data they derived from the operationalization of CPT, they experimented with several SIM. Following a thorough investigation via computer simulation, they reached important theoretical and practical conclusions.


  1. Goodall, B. (1987) The Penguin Dictionary of Human Geography. London: Penguin.


  • Openshaw S, Veneris Y, 2003, "Numerical experiments with central place theory and spatial interaction modelling" Environment and Planning A 35(8) 1389 – 1403 ([98325])
  • Veneris, Y, 1984, Informational Revolution, Cybernetics and Urban Modelling, PhD Thesis, University of Newcastle upon Tyne, UK.

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