Location Theory - 3D Bid Rent Curves Become Urban Form

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Just as the bid rent curve is not linear, neither is the earth upon which it is projected flat. The initial view shows the cone shape of an economic topographical map arising from the bidding process as it occurs in all directions from the center of activity. Note that the "rent gradient" is the rate at which rents decline as one moves away from the center in a particular direction. The more shallow slope indicates the slower rate of rent decay and would be considered the "path of progress".


Using the "secondary" slider you can see the emergence of secondary centers of activity (there need not be three of them and they need not be equidistant from each other) creating new high-rent districts away from the center. Using "distance", you can adjust the distance away from the center at which these secondary peaks appear. Using "direction", you can model the direction, relative to the center, where these new high-rent districts appear. Finally, perhaps with the construction of an interstate bypass highway commonly known as a beltway, these "edge cities" agglomerate into a megalopolis ring. The controls are best operated in sequence and with "secondary" left in its extreme right position as the others are used.


Contributed by: Roger J. Brown (March 2011)
Reproduced by permission of Academic Press from Private Real Estate Investment ©2005
Open content licensed under CC BY-NC-SA



The permutations are endless. Complications such as political boundaries, waterways, and mountains that restrict growth in particular directions may truncate progress along any one particular path.

More information is available in the first chapter of Private Real Estate Investment and at mathestate.com.

R. J. Brown, Private Real Estate Investment: Data Analysis and Decision Making, Burlington, MA: Elsevier Academic Press, 2005.

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