Bid Rent Theory


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Published in: Economy & Finance, Technology

Bid Rent Theory

  1. 1. Preparing for your coursework The coursework itself… Marks are awarded for different sections. Applied Understanding Methodology Data Presentation Data Interpretation Evaluation. Each section carries the same amount of marks. (Maximum 6 marks in each section)
  2. 2. Applied Understanding <ul><li>This is not a section on it’s own, it is a thread that runs through the whole piece of work which is why it is probably the most difficult thing to get right. </li></ul><ul><li>Throughout your study, the examiners will be looking for: </li></ul><ul><li>Evidence that you can locate your study are in detail. </li></ul><ul><li>Evidence that you can describe and explain things thoroughly </li></ul><ul><li>Evidence that you thoroughly understand the key ideas, concepts and processes involved in your study. </li></ul><ul><li>Evidence that you can apply your understanding constructively to the geographical question </li></ul><ul><li>Evidence that you can use a wide range of appropriate geographical terminology (key words) </li></ul>
  3. 3. Distance Decay What is it? How is it related to land use? How can we use it in our coursework?
  4. 4. Distance Decay theory <ul><li>In order to have a good understanding of the way urban areas are likely to grow, it is important to have an understanding of Distance Decay theory. </li></ul><ul><li>When we collect our data in Blackpool we will be able to see whether the Distance Decay theory applies there or not. </li></ul><ul><li>We will then be able to offer explanations as to how and why is does/doesn’t fit the model. </li></ul>
  5. 5. The Distance Decay Model
  6. 6. Price of land Low High C.B.D. Distance As distance from the CBD increases there is less competition for land, so values fall (distance decay) Shops and offices can afford high land values of the CBD Industry Residential Shops and offices Industry cannot afford the highest land values so is found away from the CBD Housing can only afford low land values. Simplified Distance Decay Model
  7. 7. Price of land Low High C.B.D. Distance Simplified Distance Decay Model
  8. 8. Distance Decay Model <ul><li>The land use model or Distance Decay theory is based on the assumption that the highest bidder will obtain the use of the land. Competition will be keenest in the city centre or CBD as it is the most accessible and there will be a shortage of space. </li></ul><ul><li>Department stores because of their high sales and profits can afford to bid a high price and make up for the high cost by building stores with many floors. </li></ul><ul><li>Marks and Spencers are a classic example of a department store willing to pay maximum land prices. As a large company they can afford the initial outlay involved. </li></ul>
  9. 9. <ul><li>As you move away from the CBD the land is less attractive for stores and other uses take over. These areas are less accessible for pedestrians and are not on the main high streets. Industry , partly because it takes up more space and uses it less intensively, bids for land that is less valuable than that used for shops and offices in the CBD. This forms the transition zone. </li></ul><ul><li>Residential land is found further out where land values have decreased as there is less competition . Individual house owners cannot afford to pay the same rents as shopkeepers and industrialists. </li></ul>
  10. 10. So will it apply in Blackpool? <ul><li>There are a number of things to consider. </li></ul><ul><li>Firstly Blackpool is a seaside resort, not a typical industrial town. </li></ul><ul><li>The Distance Decay model assumes the most expensive land will be in the CBD. Is this the case in Blackpool? </li></ul><ul><li>The model does not take into account road and transport networks, relief and other features. </li></ul>
  11. 11. How can I use it? <ul><li>The Distance Decay model will be included in your coursework in the Introduction. </li></ul><ul><li>You will need to demonstrate to the examiner that you understand the principals of it and that you have tried to apply it to Blackpool. </li></ul><ul><li>This will gain you marks in the ‘Applied Understanding’ section. </li></ul><ul><li>When you come back from Blackpool if the model doesn’t fit- you may want to suggest your own. </li></ul>