Bid Rent Theory
Bid Rent Theory
Bid Rent Theory
Bid rent/land rent theory shows how much different sectors of the
economy are prepared to pay for land. Basic assumption is that
accessibility is increased with centrality and therefore retailing is
prepared to pay a high price for land in the CBD. As distance from
the CBD increases availability of land increases and it is
affordable for residential and even agricultural use.
Variations to bid-rent theory
rent
A – CBD
B – Co mme rc e / indus try
C – re s ide ntial hig h – me dium de ns ity
D – s ub -c e ntre s
E – S uburbia
A B C D E
Land use value for activity sector
according to the distance from the CBD
Land us e value
Retail
Residential (several components families)
Residential (single families)
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Black Belt
Residential District
Bungalow
Section
Residential zone
4 1
2
3
3 5
3 4
1 3 3 7
5
3
6
3 4
2
9 8