Von Thünen’s Model of Rural Land Use

Johann Heinrich von Thünen developed his model of rural land use in 1826 to explain the spatial organization of agricultural production around a central market. His model was based on a number of simplifying assumptions. He imagined an isolated state with one large, dominant urban market, where all farmers received the same prices for their produce at any given time. The state was situated on a broad, flat, featureless plain with uniform soil fertility and climate, and transportation was equally easy in all directions. Only one form of transport existed—at the time, the horse and cart—and the cost of transportation was proportional to the distance travelled. Farmers were assumed to be rational economic decision-makers, equally knowledgeable about market needs and driven to maximize profits.

Under these conditions, Von Thünen observed that as the distance from the market increased, the intensity of production decreased, and the type of land use varied in predictable patterns. The concept of locational rent—the difference between revenue and the combined costs of production and transportation—was central to the model. Locational rent represented profit and could be calculated using the formula:

LR = Y(m – c – td)

Where:

• LR is Locational Rent
• Y is the yield per unit of land (e.g., per hectare)
• m is the market price per unit
• c is the production cost per unit of land
• t is the transport cost per unit of commodity per distance
• d is the distance from the market

In this formula, Y, m, c, and t remain constant, making distance the only variable affecting profit. Since transportation costs rose with distance, farmers closer to the market could afford to grow more perishable, higher-value crops, while those farther away focused on less perishable goods with lower transport costs.

Von Thünen assumed all farmers faced identical prices and production costs, meaning transportation cost alone determined differences in profit. His original model was later modified to be more realistic. For example, the introduction of a navigable river provided a cheaper and faster alternative to horse-and-cart transport, and the addition of a secondary urban settlement created its own agricultural zone.

In the diagram representing the model, the X-axis measures distance from the market, while the Y-axis represents locational rent. As distance increases, locational rent decreases until it reaches a point—d, the margin of cultivation—beyond which farming is no longer profitable. Another key point is c, the margin of transference, where one type of land use becomes more profitable than another. For instance, vegetables, which require intensive cultivation and fetch higher prices, are grown closer to the market, while wheat, which is less perishable and suited to extensive farming, is grown further away. In diagrams, darker shading typically indicates vegetable production and lighter shading represents wheat cultivation.

Limitations of Von Thünen’s Model

The model, while influential, has several limitations. It is outdated, having been developed in the 19th century before motor vehicles, refrigeration, and electricity transformed agriculture and food distribution. Its assumptions are overly simplistic: there are no truly isotropic plains, and real-world landscapes feature multiple markets, varied transport routes, and irregular terrain. Not all farmers behave as purely rational economic agents, and government policies—absent from the model—play a significant role in shaping agricultural patterns. Furthermore, it predates the Green Revolution, which significantly altered global farming practices.

Relevance Today Despite its shortcomings, the Von Thünen model still offers useful insights. It illustrates the principle that farmers generally grow crops suited to market conditions and local soil in order to maximize productivity, leading to patterns of land use zoning. Examples can be seen in Uruguay, where land use intensity decreases with distance from the capital, Montevideo. In Fray Bentos, land use follows a more linear pattern along a navigable river, reflecting the influence of cheaper transport routes. The model also highlights the trade-off between transportation costs and land values, showing why land prices tend to rise nearer to urban centres.