Von Thünen Revisited: A Neoclassical Land Use Model

Imagine a very large city in the midst of a fertile plain not traversed by any navigable river. plain's soil is of uniform quality and capable of cultivation everywhere. At a great distance from the city the plain turns into an uncultivated wilderness separating this state from the rest of the world. ... The question is this: under these conditions what kind of agriculture will develop and how will the distance to the city affect the use of land if this use is chosen with the utmost rationality? This famous problem of von Thiinen is ordinarily treated in the manner of the master himself: as an activity analysis problem with fixed technical coefficients and land availability as a single constraint (Beckmann, 1968). purpose of this paper is to treat the problem using neoclassical production functions for agriculture-or residential land use whichever problem is considered. It is often thought that the surprising result of von Thiinen's analysis, the sharp division of land into zones of specialized land use, is due entirely to the fixed coefficients of production. And it may be suspected that the possibility of continuous land-labor substitution will generate a more gradual transition between types of land use. Similarly it may be thought that the simple and elegant condition describing the sequence of land use zones in von Thiinen's economy is tied to its fixed coefficients: the output per acre in weight units must fall from zone to zone and is constant within a given zone. In any case, the fact that the proportions of labor, land and capital