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Models and Theories Location and Development - EricksonClassroom


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									   Models and Theories
Location and Development
 Location Theories and Industrial Location

•Location Theory
   •Any theory used to predict where businesses
   will or should be located.
•Range – How far will people travel to purchase
•Threshold – Number of people needed to
support business
          All location theories deal with:
•Variable costs – energy supply, transportation expenses and
labor costs.

•Friction Distance:
   •Increase in time and cost that usually comes from an
   increasing distance from your market.
       • ( Distance Decay)
•Factories will be concerned with serving the needs of
nearby markets, rather than those farther away.
     Christaller’s Central Place Theory
• Market areas (places of buying and selling) are arranged in
  a regular pattern (meaning they are predictable).
• The larger the settlement, the farther it is from another
  large settlement
• The smaller the settlement, the closer it is to other smaller
  settlements AND probably a larger settlement
• Larger settlements are important because they provide
  goods and services not available to smaller settlements
• When drawn, it looks like a hexagon
 Christaller’s Central Place Theory

Why the Theory?
• The purpose of the theory is to show patterns
  in settlements, to help us understand the
  relationship and interactions between larger
  and smaller settlements
Most importantly: it helps producers find out
  where the most profitable location to start or
  run a business would be – the bigger the
  settlement, the more likely the business will
  do better, right?
Central Place Theory
                        Weber’s Model
•Developed a model for the location of manufacturing plants
•Least Cost Theory
   •location of manufacturing plants are located in terms of the
   owners desire to minimize three categories of costs:

    1. Transportation
    2. Labor
    3. Agglomeration – large number of
       same/interdependent companies in one area
                  Hotelling’s Model
•Locational interdependence
    •Location of an industry can not be understood without
    reference to the location of other similar industries

• For Example:
   •Why McDonald’s, Burger King, and other Fast food
   restaurants are all located close to each other.
                     Losch’s Model
•Profit maximation is emphasized.
•Is the business in the best location in order to make the most
•This would be an ongoing model, as other companies develop
or go out of business you would have to adjust.
Development Models and Theories
• These theories deal with why and how
  countries have or have not developed
• No theory or model is perfect, but it explains
  some parts of the whole
          Rostow’s Development Model
• 5 stage mode of development
  – Traditional society – not yet started development
     • Lots of ag, lots of money allocated to military and religion
  – Pre-takeoff - elite group initiates changes
     • Begins to invest in infrastructure like water, transportation etc
  – The Takeoff – rapid growth into a few activities (textiles or food)
     • These develop while rest of country is still traditional
  – Maturity – modern tech moves from takeoff industries to others
     • Rapid growth and workers become more skilled
  – Mass consumption – from heavy industry to consumer goods
     • From steel and energy to vehicles and refrigerators
             Assumptions Made
• Assumptions
  – All countries will have similar developmental
  – Intrinsic factors such as natural resources and
    culture will not affect development
  – Countries that undergo development at different
    times in history will undergo the same processes
  – All countries will have the same access to
  – The natural goal, path, and purpose of all economies
    is to increase productivity and material consumption
           Dependency Theory
• This theory basically says that certain regions
  and countries control and limit the
  development possibilities of poorer countries
• Examples
  – Colonialism
  – Currency tying (dollar)
• The DT has little hope for development –
  some say this is too pessemistic
         World-systems Theory
• Immanuel Wallerstein
• Three tiered system: core, periphery, semi-
  periphery levels
  – Core – dominant in the global economic game
     • Activities generate wealth for that country
  – Periphery – dependent on core regions and do not
    have much control over their own affairs
     • Activities generate little wealth for that country
  – Semi-periphery – has a little of both. Some control
    over own affairs but still heavily influenced by core

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