Bid Rent Curve and Urban Structure
Key Concepts
- Bid Rent Curve: A theory explaining urban structure and land value variations based on distance from the Central Business District (CBD).
- Land Value and Distance: Land value decreases as the distance from the city center increases.
- Space Occupancy: Larger spaces are available further from the city center.
Factors Influencing Land Value
- Access to Market: Essential for businesses; closer proximity to CBD is desirable.
- Transport Costs: Businesses aim to minimize these by being close to the city center.
- Profit Maximization: Achieved by optimizing location for maximum returns on land.
Bid Rent Curve Explained
- Definition: A line indicating the amount a person is willing to pay for land at varying distances from the CBD.
- General Rule: Land prices decline with increasing distance from the CBD.
Land Use Categories
- Commercial Land
- Prefers proximity to the CBD.
- High demand results in high land value.
- Zero demand beyond a certain distance due to unprofitability.
- Industrial Land
- Requires more space, less inclined to pay high CBD prices.
- Zero demand at distances where transport costs outweigh profits.
- Residential Areas
- Located further from the CBD.
- Zero demand beyond a point where distance becomes impractical for city workers.
Land Use Patterns and Competition
- Point of Competition: Different land uses compete for space at certain distances.
- Exclusive Use Areas: Certain areas become exclusive to either commercial or industrial activities due to competition.
- Commercial Areas: High-rise buildings to maximize space use.
- Industrial Areas: Larger plots required, located further out.
- Residential Areas: Further from the CBD, bordered by rural-urban fringe.
Modern City Complexity
- Multiple CBDs: Large cities have multiple CBDSs as they expand.
- Peak Land Intersections: Land value peaks at intersections and outlying CBDs.
- Spider Web Structure: Urban layout resembles a network of roads and intersections.
- Main Roads: Red roads connecting different city parts.
- Ring Roads: Encompass the city providing accessibility.
Implications of Bid Rent Curve
- Urban Land Use Zones: Explains why different zones exist within a city.
- Commercial Activity: Concentrated around CBD and intersections.
- Shopping Malls: Develop at outlying CBDs and intersections for accessibility.
The bid rent curve provides insights into urban planning and the economic rationale behind land use decisions based on proximity, accessibility, and profitability.