Central Place theory

Central Place Theory (CPT) is an attempt to explain the spatial arrangement, size, and number of settlements. Central place theory is an economic theory which explains patterns of urbanization and establishment of market areas for different goods and services. The theory was originally published in 1933 by a German geographer Walter Christaller, who studied the settlement patterns in southern Germany. In the flat landscape of southern Germany, Christaller noticed that towns of a certain size were …

…describing the location of trade and service activity. (It also does a good job of describing consumer market oriented manufacturing.) Trade and service activity has an increasing relevance as the U.S. economy shifts from manufacturing to services over time. Small-town community economic developers can secure quite specific, relevant information about what kind of trade or service enterprise will likely work, and what kind of enterprise will not likely work in a given small community.