The theoretical framework that land value and rent decrease as one moves away from the central business district (CBD). This concept posits that different land users are willing to pay different amounts, or “bid,” for land depending on its proximity to the city center. For example, retail businesses generally seek locations in the CBD due to high accessibility and customer traffic, enabling them to afford the high land costs. Conversely, agricultural activities, requiring extensive land, typically locate further from the urban core where land is cheaper.
Understanding this economic model is crucial in urban planning and geographical analysis. It explains patterns of urban land use, predicting which activities will cluster where within a city. It also sheds light on urban sprawl, land price gradients, and the segregation of different economic activities. Historically, this model developed alongside the growth of industrial cities and the increasing specialization of urban land use, providing a lens through which to understand urban spatial structure evolution.
