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Land Use and Value

EQ: “How does the bid rent curve and Von Thunen’s Model explain land use and value?”

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Bid Rent Curve

  • Bid Rent Curve:
    • Land value
    • Scarcity and Demand
    • Most expensive closest to market.
    • Least expensive farthest away from market.

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Von Thunen’s Model

  • Two costs the model is based on:
    • Transportation Costs
    • Land Costs

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  • Model made before the I.R.

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  • Model assumptions
    • Isolated State
      • City central
      • Self-sufficient
      • No globalization
    • Uniform Geography
      • Flat land (no rivers or mts)
      • Fertile soil
      • Consistent climate
    • No Roads
    • Farmers act to maximize profits

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Von Thunen’s Model

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Von Thunen

Explain the degree that Von Thunen’s model applies to agriculture today.