Christaller’s Central Place Theory | Urban Geography & Economics

Central Place Theory (CPT) – Locational Theory

Central Place Theory is a spatial theory in urban geography and urban economics. CPT explains the spatial arrangements, patterns and distribution of urban areas and human settlements. Central place theory was given by Walter Christaller in 1933 on the basis of settlement patterns in southern Germany. This study included analysing the relationships between settlements of different sizes and related their economic activities (market) with the population. It is based upon the central place system and city size distribution. Various geographers and urban planners study such theories and urban development models as a part of urban studies, regional science and hierarchical arrangement of human settlements.

This article will explain what is central place theory as location theory, size distribution and urban system.

  • Relationship between the size, the number and the geographic distribution of cities.
  • Central place hierarchy – Central place has the main function to supply goods and services to the surrounding population (Market Area), retail location and market centers.
  • Based on concept of RANGE (it is economic, not mathematical)

Central Place Theory

German Geographer Walter Christaller explained the hierarchical arrangements and settlement pattern in his central place model. He explained why the highest order settlement has very peculiar activities. These activities can only be supported by one large central city and the reason behind those activities taking place only in those particular highest order settlements. He also explained the nature of activities in different order of settlements such as metropolitan areas. Central place theory is of great importance even after decades and forms the basis of various present-day theories used in urban planning. It also explains various advantages of living in urban areas and large cities.

  • The theory is essentially static, explaining the existence of a regional spatial structure but failing to explain how that structure has evolved and it might change in the future.
  • It serves a useful role identifying important concepts such as the interdependence of a city and region, a hierarchy of functions and centers, and market range and threshold populations.
  • Range also depends on the type of demand of the central good. If the demand is inelastic (urgent, non-substitutable; e.g. Hospital), then the range is large and if the demand is elastic then range is smaller (e.g. Cinema)
  • Larger the central place, the greater will be the range as compared to smaller central places. (lower production cost leads to larger amount of sales).
  • Higher population density implies greater range, as again higher density makes production cheaper.

Related Articles:

  1. Multiple Nuclei Model of 1945 by C.D. Harris and Edward L. Ullman
  2. Hoyt Model or Sector Model (1939) of Urban Land Use by Homer Hoyt
  3. Burgess model or concentric zone model (1925) by Ernest Burgess

Assumptions of Christaller’s Central place theory

Christaller made some assumptions to make his theory easy to understand and form the basis for other theories. These assumptions were necessary and hold good to explain the structure of settlements. These also take into account the economic growth and development of towns, human behaviour, human geography, economic theory and fundamentals of economics. He made following assumptions:

  • An even  (flat) terrain – A hilly and uneven terrain poses difficulty in development thus a flat area which promotes the growth of the town
  • Evenly distributed population – residents are not concentrated at one particular place and no preference exists for a particular town
  • Evenly distributed resources – no place has an advantage of resources, all placed will compete under perfect market conditions
  • Similar purchasing power – along with the population and resources, wealth is also fairly distributed. Because of this people have similar purchasing power
  • Preference for the nearest market – people will buy products from the nearest market and avoid the long commute. This keeps price constant as per other assumptions
  • Equal transportation cost (proportional to distance) – the cost incurred in transporting of goods is equal for all and is proportional to the distance
  • Perfect competition – price is decided on basis of demand and supply. People will buy at the lowest price which the market has to offer, no seller has an advantage over another seller.

These assumptions when combined, results in place offering different services. In these places in which people enjoy the perfect market and purchase from the nearest place to save on money and time. Different services locate themselves on the basis of the threshold population. The minimum number of people required to sustain that service/activity. In addition to this, there is no preference for a particular shop. All people have access to equal resources and do not enjoy any advantage over its competitor. The demand for goods consumed & used on a daily basis will be used more and vice versa.

Explanation of terms: Central Place definition, low order, high order, sphere of influence

  1. A Central Place is a settlement which provides one or more services for the population living around it. It has the highest order in urban hierarchy and houses the most expensive and beneficial economic activity.
  2. Simple basic services (e.g. grocery stores, department stores) are said to be of low order. Specialized services (e.g. universities) are said to be of high order.
  3. Having a high order service implies there are low order services around it, but not vice versa.
  4. Settlements which provide low order services are said to be low order settlements.
  5. Settlements that provide high order services are said to be high order settlements.
  6. The sphere of influence is the area under the influence of the Central Place.

Two main concepts of Central Place Theory

As per Walter Christaller, Central Place Theory is based on 2 fundamental concepts which are “Threshold” and “Range”

Threshold – The minimum population needed to make a service viable at a particular place. If this size is not reached then a particular activity will not start or it will be closed down.


Range – This is the maximum distance a consumer is willing to travel to purchase goods or avail a service, beyond this distance consumer will not travel as the distance travelled for good/service will outweigh the benefit. Range has two limits, Upper Limit denotes an area beyond which there will be no buyer willing to travel. And, Lower Limit denotes an area needed for a firm to make profits and have sufficient demand.

Related: Multiple Nuclei Model of 1945, Nazi spatial theory : the dark geographies of Carl Schmitt and Walter Christaller 

Sizes of settlements/communities as per central place theory

Walter Christaller gave a system with 5 sizes of settlements based on population. The smallest unit is Hamlet which is considered a rural community and the largest unit is Regional Capital.  The rank order of central places in ascending order include:

  1. Hamlet
  2. Village
  3. Town
  4. City
  5. Regional Capital/ Metropolis

Markets and Services tend to be nested hierarchies with smaller towns serving smaller markets. However, transportation and border effects can shift the distribution of towns away from theoretical uniformity.

The arrangement of the Central places/ settlements:
As transport is equally easy in all direction, each central place will have a circular market area as shown in C in the following diagram:

Central Place Theory - arrangement of central places

However, the circular shape of the market areas results in either un-served areas or over-served areas. To solve this problem, Walter suggested the hexagonal shape of the markets as shown in D in the above diagram. Within a given area there will be fewer high order cities and towns in relation to the lower order villages and hamlets. For any given order, theoretically, the settlements will be equidistant from each other. The higher order settlements will be further apart than the lower order ones.

Principles in the arrangement of the central places:

Christaller’s theory gives 3 principles which are the marketing principle, transport principle and administrative principle for orderly arrangements and the formation of hierarchy. As per the proposed geometry and ordering, settlements are regularly spaced – equidistant spacing between same order centres, with larger centres farther apart as compared to smaller centres. The market area is hexagonal shaped as it is free from overlapping, most efficient in both number and function. The spatial distribution of urban centres gives rise to urban hierarchy. Three Principles of Christaller’s for determining distribution of central places in a region.

  • Marketing principle: If the distribution is entirely based on the range of the goods, then it would result in evenly spaced central places with hexagonal market area.
  • Traffic principle:  If any central place (city) is smaller in size  than expected than it be because of lower accessibility (not falling on major transport routes) and vice-versa
  • Separation principle: Spacing and sizing of Central places can sometimes be distorted due to socio-political consideration.

The different layouts predicted by Christaller have K- values which show how much the Sphere of Influence of the central places takes in — the central place itself counts as 1 and each portion of a satellite counts as its portion:

  1. Marketing Principle (K=3)
  2. Transport Principle/ Traffic Principle (K=4)
  3. Administrative Principle (K=7)

The three principles of central place theory are as follows

Marketing Principle (K=3): As per this the market area of a higher order occupies one-third (1/3 part) of the market area of each of the consecutive lower size places (nodes) which lie on its neighbour. The lower size nodes (6 in numbers and 2nd larger circles) are located at the corner of the largest hexagon around the high-order settlement. Each high-order settlement gets 1/3rd of each satellite settlement (which are 6 in total), thus K = 1 + 6×1/3 = 3.

With K=3 the transport network is not efficient even when the distance travelled is reduced. This is because of the absence of transport links (network) between the larger places (nodes).

Transport Principle (K=4): This provides for the most efficient transport network. High order place half of the market area of 6 neighbouring lower order places located on the edge of the hexagon formed by high order settlement. There are maximum central places possible. These are located on the main transport routes connecting the higher order center. The transportation principle involves the minimization of the length of roads connecting central places at all hierarchy levels. In this system of nesting, the lower order centres are all located along the roads linking the higher order centres. This alignment of places along a road leads to minimization of road length. However, for each higher order center, there are now four centres of immediate lower order, as opposed to three centres under the marketing principle.

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  4. Satellite City

Administrative Principle (K=7): According to K = 7 administrative principle (or political-social principle), settlements are nested according to sevens. The market areas of the smaller settlements are completely enclosed within the market area of the larger settlement. Since tributary areas cannot be split administratively, they must be allocated exclusively to a single higher-order place. Efficient administration is the control principle in this hierarchy.

K = 7 Administrative principle

Hierarchy of Central Places

Christaller suggested that the central places (central city, metropolitan areas and central business district), providing goods and services to the surrounding areas would form a hierarchy. A large number of widely distributed small places would provide lower order goods, public services, and to serve regular widespread demand. There would be a smaller number of larger centers providing both lower-order and higher-order goods and services. Successive steps of the hierarchy would consist of larger central places providing even higher-order goods and services.

Central Place Theory - hierarchy of central places

Complementary Regions
Each town or city exerts its influence over surrounding areas. People come from the surrounding area to the town for goods, services, and jobs. The area over which the town exerts its influence has been termed complementary region. The term market area used in the context of specific goods and services. The larger the town, the larger is its complementary area. The larger the city, the greater the likelihood of very specialized goods and services. This attracts people from all over the world. For example, the largest cities like New York, Paris, London, and Rome attract people from across the globe. Their complementary areas are international.


Southern Germany displays a 7-level hierarchy of central places.

table of hierarchy of central places in southern Germany

*Centrality is operationally defined by Christaller as the number of telephones in a central place minus the place’s population multiplied by the average density of telephones per population in the region. The highest order centers, those with the greatest centrality index were Frankfurt, Nuremberg, Stuttgart, Strasbourg, Zurich, and Munich.

Criticism & limitations of Christaller’s central place theory

Central Place Theory is widely appreciated and used but has its own limitations. These include the assumptions which are unrealistic. The basic assumptions are flawed. It is nearly impossible to have very large flat terrain, perfect market, and absence of preference for shopping places. Today’s economy is a capitalist economy, but the government plays an equally important role which has a strong influence on the market and the location of activities. Moreover, the resources are never equally distributed, and some enjoy disproportionate benefits. Same is true for purchasing power. Thus to make it functional as per actual scenario various modifications are required in the basic theory. Theory relates only to the service sector

Losch’s Central Place Theory

A modified version of original central place theory was given in 1954 by a German economist August Losch in 1954. Losch believed that the CPT was too rigid, and suggested few changes related to consumer behaviour, social system, economic geography, economies of scale while keeping in mind the locations and profits. Losch’s CPT was consumer oriented while retaining the basic principles of original theory. This modified version can be identified in various cities and towns even today.

Related Concepts Articles:

  1. The Rank Size Rule by George Zipf (1949)
  2. Rural Urban Fringe
  3. Rural Urban Continuum & its causes 
  4. What is Urban Growth?
  5. What is Counter Urbanisation?
  6. Von Thunen’s Model
  7. Central Business District (CBD) | Characteristics, Examples, Pros & Cons