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What is the Von Thunen Model?

The Von Thunen Model is a theory by 19th-century German economist Johann Heinrich von Thunen which outlines an ideal state centered around farming practices.

The Von Thunen Model is a theory fronted by 19th-century German economist, Johann Heinrich von Thunen which outlines an ideal state whose plan revolves around farming practices, focusing on a plan which would make farming most profitable. From the model, the economist was able to come up with a formula which he saw would make it possible for farmers to select an ideal location for establishing a farm, and which would maximize the farmer’s profits. The equation used in the formula was L= Y (P-C) – YDF where L represents the location rent or the land value, Y represents Yield, P represents the Market Price of the produce, C represents the Production cost of the produce. Whereas D represents the Distance of the farm from the market, and F represents the Transport cost of the farm produce to the market. Johann Heinrich von Thunen conceived the model before the dawn of the industrial revolution before coal was used to fuel the industries. Johann envisioned an ideal urban plan where the sources of all the necessary provisions including grains, dairy, meat, and firewood, were located in regions surrounding a town. The model envisioned these regions as four rings which surrounded a central urban center, where different activities were undertaken in each of the four geo-economic rings.

The Von Thunen Rings

The hypothetical state depicted in the Von Thunen Model was made up of four rings. Von Thunen came up with the arrangement to have an efficient system where the transportation of provisions required in the central urban center was efficient. The central urban region of the state represented the bull’s eye of the rings. The innermost ring represented regions where dairy and horticultural farming would be best suited. Von Thunen argued that it was necessary that the location of the farms where these perishable commodities were cultivated be as close to the urban center as possible to avoid the spoiling of the produce while on transit. The next ring represented regions ideal for the production of firewood and timber, and therefore, the region would be made up of forests. In Johann’s time (the 19th century), firewood was the main source of fuel for most industries as well as in domestic applications. Von Thunen thought that the source of firewood and timber also needed to be close to the urban center due to the logistical issues involved in the transportation of the bulky forestry products. The ring adjacent to the firewood ring represented extensive fields in which the large-scale farming of grains such as wheat would be practiced. The economist saw that since the grains were durable, not prone to spoiling, and were not bulky in transportation, the fields in which they were cultivated did not need to be close to the urban center. The outmost ring represented regions where ranching would be best suited to be practiced. The reason behind ranching being placed furthest away from the urban center was because it was the economic activity which required the largest space (with forests being the notable exception) to be practiced. The economist also argued that ranchers did not to incur transportation costs since they walked their animals to the slaughterhouses situated inside the urban center.

Johann Heinrich von Thunen

Johann Heinrich von Thunen was a 19th-century German economist who is credited with coming up with the Von Thunen Model. Johann Heinrich von Thunen was born on June 24th, 1783 in Canarienhausen (present-day Friesland). The economist who received higher education at the University of Rostock was an economist and also a prominent landowner. One of his most famous work was the establishment of a mathematical formula used to calculate the marginal productivity of land. The formula incorporated economic geography and spatial economics to the provisions of the theory of rent to form what is known in economics as “Thunen Rent.” Johann Heinrich von Thunen died on September 22nd, 1850 at the age of 67 years and was buried in Tellow (present-day Rostock).

Assumptions of the Von Thunen Model

While the idea aimed to have a noble purpose, there were several assumptions made by Johann Heinrich von Thunen which made the plan not as plausible as he thought it would be. First of all, the amateur economist assumed that his hypothetical state would be self-sufficient in all sectors and had no external influence. The assumption makes Johann’s state only existent in theory since no country can exist without interacting with its neighboring countries, whether the country is self-sufficient or not. Some kingdoms in the past attempted to isolate themselves from external influence, and that decision led to their downfall, with a good example being the Imperial Kingdom of China which shut down its borders from external visitors in the 15th century and ultimately led to its downfall. Another assumption seen in Von Thunen’s Model is that the soil quality was consistent throughout his hypothetical state, which is rarely the case in real life. Soil composition is affected by numerous factors which vary throughout a geographical area, making soil composition lack homogeneity. Another assumption seen in the model is the consistency of the hypothetical state’s climate. Even small countries do not experience uniform climatic conditions throughout their respective territories. Johann’s hypothetical state is also assumed to have an unoccupied wilderness surrounding it. Such a scenario is only possible if the state is situated on an oasis in the middle of a desert, which while plausible, is highly unlikely. Another assumption of Johann’s hypothetical state is that it lies in a completely flat terrain, absent of mountains, hills, and valleys, an assumption which can only be possible in theory but never in practice. There are extremely few regions around the world which are completely flat and such regions are too small to be considered as a state. Johann’s state did not even have rivers or a natural drainage system. The farmers in the state are said to transport their farm produce from the fields to the central urban center, without using roads because Johann’s state does not have an inch of the road network. The assumption of a state which would exist without the establishment of a proper road network is far-fetched, even by the Von Thunen’s standards, since the crucial role roads had in the development of a country was known much earlier during the reign of the Roman Empire.

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