Why do small towns have a gas station and a grocery but no sports arena? In 1933 the German geographer Walter Christaller offered an answer in his study of towns in southern Germany. It builds on the distance decay you met earlier: people go farther for some things than for others.
Key idea
A central place is a town that provides goods and services to the area around it (its market area, or hinterland). Each good has a threshold, the minimum number of customers needed to stay in business, and a range, the farthest distance people will travel to buy it.
| Low-order goods | High-order goods | |
|---|---|---|
| Examples | Groceries, gas, a coffee shop | A heart surgeon, a pro sports team, a major airport |
| Threshold | Small: a few hundred to a few thousand people | Large: hundreds of thousands or millions |
| Range | Short: people will not drive far for gas | Long: people will travel hours |
| Found in | Every village, town and city | Only large cities |
Why it works
A good is offered only if enough customers live within its range to meet its threshold. Groceries pass that test almost everywhere, so they are in every village. A specialty hospital needs so many patients that only a big city has enough people within reach. The result is a hierarchy: many hamlets and villages with low-order goods, fewer towns, and a few cities that offer everything. Christaller drew market areas as hexagons because hexagons cover a plain with no gaps and no overlaps, the way circles cannot.
Worked example: Does the store open?
A bookstore needs 6,000 customers (its threshold). People will travel 5 km for it (its range). The area around the town has 80 people per square km. Is the threshold met?
- The market area is a circle of radius 5 km: $\pi \times 5^2 \approx 78.5$ square km.
- People inside: $78.5 \times 80 \approx 6{,}280$.
- 6,280 is more than 6,000.
Answer: Yes, barely: about 6,280 people live within range.
Worked example: Threshold or range?
A new movie theater closes because, although people come from 30 km away, there are not enough of them. Was the problem the range or the threshold?
- The range (30 km) was large.
- The number of customers was too small.
Answer: The threshold was not met.
Common mistake
Mixing up threshold and range. Threshold is how many customers are needed; range is how far a customer will go. A memory hook: threshold counts totals of people, range is road distance.