Concept:
Johann Heinrich von Thünen's model (1826) explains the spatial organization of agricultural activities around a central market city.
Step 1: Understanding Economic Rent.
The core of the theory is Economic Rent (or Location Rent). This is the surplus value produced on a unit of land, which varies based on two main things:
• Distance from the market.
• The transport cost of the specific crop.
Step 2: The Rent Gradient.
As distance from the city increases, the transport cost increases, and the economic rent for a specific crop decreases. Different crops have different "rent gradients." This results in a series of concentric rings around the city where different agricultural activities dominate based on which one can pay the highest rent at that distance.
Step 3: Rejecting Fertility Differentials.
Unlike David Ricardo, Von Thünen assumed the land was an "Isotropic Plain" (equal fertility everywhere). Therefore, land use is determined by location/distance, not soil quality.