Distance Decay Model + Bid-rent Theory

• What does this model show?

  Land values in relation to distance from CBD

  As distance from CBD increases less comeptition for land so value decreases (distance decay)
• What does the bid-rent theory state:

  M&S want access to meet most customers in city centre. They build upwards to minimise purchase > can afford initial outlay for purchase/ rent knowing that they have greatest chance for reaching customers

  • Shops pay more for land closer to CBD and less for land further away, the more accessible the area is then the more profitable it will be
  • The amount of people willing to pay is Bid Rent
• Bid rent theory


  Shows price and demand on land changes as the distance from CBD ↑

  
• Limitations of Bid Rent model

  • Very simple, only 3 broad zones
  • Assumes straight lines for cost curves, no scale
  • Doesn't take into account transport networks, planning decisions or physical environment
  • Sometimes low income can be found in centre of a city but they were in in cramped residential building with high density of people due to high rents