~ ~ c N ~ l ~ ~ l * ANALYSIS, ~ l l l ~ : + l Vcd.

I (July 1977). Submitted 5/75. Acwpted 4/76. X

Roger W. White*

Dynamic Central Place Theory: Results of a Simulation Approach

A dynamic central place theory is formulated as a simulation model in which retail activities, described by cost equations, and consumers, described by spatial interaction equations, interact to generate a central place system. The behavior of the model is then examined. Simulation results show that the basic character of the system-whether it is agglomerated or dispersed-depends primarily on a single parameter in the interaction equation, and only secondarily on the specification of the cost function. The results are highly robust in that they are largely independent of the initial sizes and locations of centers, and even independent of the type of interaction equation used. The patterns generated appear plausible.

INTRODUCTION Classical central place theory has an honorable position in the field of geography; but like many venerable institutions, although it is highly honored, it is little used. It is in fact largely an unusable theory. The reasons are well known and have to do essentially with the theorys being based on rigid and unrealistic assumptions. There is thus a clear need for a theory that is more realistic and workable. There have been several advances towards such a theory: the simulations of central place patterns by Morrill [ 5 ] ,and the well-known work of Berry and Garrison [Z, 3, 41 and Berry and Barnum [ I ] , constitute two early and notable examples; but the situation is still not satisfactory. An earlier paper by the present author [81, proposed a dynamic theory of central places. The basic premise of the theory is that any central place pattern is the result of the differential growth (or decline) of the various centers making up the system. In addition, it is assumed that
This research was supported by grants from the Macrogeo raphic Systems Research Workshop and the Deans Research Fund of the University of 8estern Ontario.

Roger W . White i s assistant professor o f geography, the University of Western Ontario at London.

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/ 227

the growth (or decline) of each center depends on what may be called its profitability: when the revenue attracted by a centralplace significantly exceeds the cost of providing the goods and services, the center will grow, whereas if costs exceed revenue, the center must in the long run decline. Since the revenue received by a retail center depends on the spatial behavior of consumers, and the costs incurred depend on the cost structures of the firms or retail sectors involved, the theory is essentially a fusion, within a dynamic framework, of spatial interaction theory and the theory of the firm. Specifically, the central place system is represented by a system of nrn first-order difference equations, one equation for each sector (or activity) in each center:
t+l

S , = tSij

+g,

['Rij- ' C i j l ,

for all places i = 1,.. . n, sectors j = 1,. . . m, and times t = 0, 1 , . . . , where 'Sij > 0 = size at center i of sector j at time t g , = growth function (gi, > 0 by assumption) ' R , = revenue function for sector j in center i at time t tCij= cost function for sector j in center i at time t. Taken at face value, however, these equations represent only an elaborate description of central place dynamics. The content of the theory lies in the implications of the equations. In the original paper, an attempt was made to examine their implications for hierarchical structures and locational patterns but because of the impossibility of achieving solutions to large sets of simultaneous nonlinear difference equations, only very simple systems could be examined. In order to get around this difficulty, it was decided to use simulation techniques to investigate the implications of the theory for complex systems. A brief description of this approach has previously been presented [9]. The present paper is a more systematic and thorough, though still far from comprehensive, investigation of the implications of the theory. The use of simulation techniques for problems of this type requires the specification of the particular models whose behavior is to be observed. But since each model is precisely specified, it represents only a particular situation. Thus, in order to build up a reasonably comprehensive picture of the implications of the theory in its general form; a large number of simulation models must be specified and run, each model in effect representing a sample point in the domain of applicability of the theory. Because of the size of the undertaking, it has not so far been possible to complete a comprehensive examination of the theory. Instead, certain aspects were chosen for relatively detailed investigation and others were given only cursory treatment or passed over altogether. First, since each equation is constructed from a revenue equation (based on an interaction equation) and a cost equation, it is clear that

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the implications of the theory will depend largely on the specification of these constituent equations. Second, because the theory is essentially one of competition in space, the present investigation is designed to reveal the basic features of that competition. Thus, the simplest possible background conditions are chosen. For example, it is assumed that the population distribution is uniform (except for the population of the centers themselves), and that there are no exogenous trends in population or mobility. Again, for a complete understanding of the theory it will be necessary to relax these assumptions. In empirical applications, of course, the specifications must be chosen to reflect actual conditions in the system being studied. Finally, the theory can, in principle, be applied at any scale. It can be used to describe the evolution of a system consisting of only two or three centers, or it can be used to describe the behavior of an entire regional or national system of centers. In the first case, interest would normally be focused on the behavior of individual centers; in the second case, however, it is the behavior of the system as a whole that is of concern. In the latter case questions are asked about the aggregate properties of the system rather than about the location or size of individual centers. For example, we may want to know whether the retail hierarchy will be nested or not, or characterized by primacy, or whether the aggregate locational pattern will be clustered, random, or dispersed. At this scale, then, the theory does function as a location theory, even though it says nothing about the location of specific centers; and it is at this level that it constitutes the analog of existing central place theories. The present paper is concerned exclusively with this aspect of the theory.

THESIMULATION MODEL
In the present model for simulating the growth of a central place system, the initial size of each sector of each center is given, and center locations are fixed. Growth (or decline) of each sector of each center is assumed to be proportional to profit (or loss) in the previous time period, and profit is the difference of revenue, given by an interaction equation, and costs, assumed to be a linear function of sector size. Specifically, the model is as follows: 1. The locations of a number of centers, the number of sectors at each center and the initial size of each sector at each center are all specified as input data. 2. Population is assumed to be distributed equally among all grid cells on a rectangular map (this assumption is a matter of convenience rather than necessity), except that those cells containing a center have populations that are functions of the amount of retail activity at the center:

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229

where '+'Pi is the population of center i at time t + 1; a j are the population parameters specified in the input data; and tSi, is the size of sector j in center i at time t. In the present paper the population parameters are set equal to zero; that is, it is assumed that the centers themselves have no population. Sector size is measured in some appropriate unit indicating scale of operation, such as number of establishments or aggregate retail floor space. 3. The cost of offering the goods of each sector at each center is a function of sector size:
tCi,= b,

+ cj t S T ,

(2)

where ' C is the cost incurred by sector j at center i at time t; b, is fixecfcost; and c j and m, are marginal cost parameters. The parameters for fixed and marginal cost are read in as input data. 4 Revenue is calculated either according to a gravity equation, .

or according to an exponential interaction equation:

where 'PXu population of grid cell x, y; 'Px, = 1 unless the cell = contains a center, in which case it is set equal to ' P i p , = per capita expenditures on goods of sector j ; in the present paper, for simplicity, p , = 1 for all j tRi, = revenue of sector j in center i at time t Dixu distance from center i to grid cell (x,y) = n, = the interaction parameter for sector j (read in as input data) x, y = grid cell coordinates. In other words, for each sector, the proportion of revenue from a given grid cell going to a given center is calculated, and the total revenue at that center is then the sum of the revenue from all grid cells. 5. Change in sector size is proportional to profit
t+l

Sij = t S ,

+g,

('Rij - 'Ci,).

(4)

Here g is the growth factor; these parameters are read in as input , data.

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6. Calculations are repeated for successive time periods until an equilibrium position is approached.
Although the model is conceptually quite simple, it is evident that in terms of the variety of situations that can be simulated, and thus in terms of the range of results that can be obtained, it is 'quite complex. The question is, then, what sort of central place systems are generated, and under what circumstances, by the model? This question is a very general one, and a number of difficulties lie in the way of giving a complete and satisfactory answer to it. The major practical problem involved in determining the behavior of the model is simply the very large number of situations that must be investigated. The growth equation for each center involves five different kinds of parameters, and ideally a reasonable range of sample values for each parameter should be tried. The number of combinations of trial values for the parameters, then, is obviously very large. I n order to distinguish the effects of the parameters from the effects of the initial conditions, it is necessary to run each set of parameters several times, each time with different starting conditions-different configurations of centers, for example, or different starting sizes. In view of the magnitude of the problem, it is necessary to restrict the investigation of the behavior of the model to certain aspects and ignore others. Thus, the present paper explores the behavior of the model primarily as it depends on the interaction equations and secondarily as it depends on the cost equations. A subsequent paper will examine the role of the population parameters, Before examining the simulation results, it will be necessary to di:scuss in some detail (1)the parameters that determine the behavior of the model, (2) the initial conditions relevant to the operation of the model, and (3) the techniques for characterizing the results.
OF PARAMETERS GOVERNING BEHAVIOR THE MODEL

The Interaction Equation and the Parameter n Two kinds of interaction equations were tested. Emphasis was on the gravity equation (3a), with the exponential equation (3b) being introduced mainly to give some indication as to whether the results obtained using the gravity equation are entirely specific to the use of that equation, or whether they are of a more general or robust nature. In both cases, a number of values for the parameter n (the distance exponent in the gravity equation, the distance coefficient in the exponential equation) were tried. For the gravity equation, only values of n from 0.5 to 3.0 were tried, since this range includes almost all values which, in empirical studies of consumer behavior, it has been found that n assumes (see, for example [6]). Also, indications are that values outside this range affect mainly the convergence rate and not the results themselves. As for the exponential equation, values of n ranging from

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231

0.01 to 0.02 were used, because values in this range are equivalent to the values used in the gravity equation, and because values of the parameter derived empirically from interaction data typically fall within this range. Values much greater than n = 0.2make very little difference in the behavior of the model. The Cost Equation and the Fixed and Marginal Cost Parameters Cost equations with zero fixed cost and constant returns to scale were used extensively in the present paper, both in order to simplify study of the effects of other parameters, primarily n, and in order to provide base data against which to judge the effects of nonzero levels of fixed cost. Fixed cost is of particular interest in connection with central place studies because it is so closely related to threshold size; thus a large number of runs were made with fixed costs set at 30. This level was chosen because it is usually in reasonable proportion to the average revenue in the system. Some trials were made with other levels of fixed cost. A range of values for the marginal cost parameters corresponding to both economies and diseconomies of scale were tried, in order to examine the effects of a nonlinear cost structure on the central place systems generated. Population Parameters. Population parameters were set equal to zero, both to provide a standard against which to judge the effects of nonzero levels, and to facilitate observation of the effects of other parameters. Results for systems with nonzero population parameters are available, and will be reported in a future paper. Growth Factors. Growth factors, which also represent response time of the system, were in every case set equal to 0.5.Their effect on the behavior of the model was thus not examined.

THE INITIAL CONDITIONS

The initial conditions consist of specifications for the number of centers, the location of each center, the number of sectors, and the size of each sector at each center. Since the purpose of the study is to investigate general system behavior rather than the behavior of individual centers within specific contexts, it is desirable to work with the largest possible systems. The constraints imposed by computing time were such, however, that the largest system with which it was feasible to work regularly was one of 20 centers and two sectors on a map with 2,500 grid cells. A system of 25 centers and 3,600 map grid cells was used in a very limited number of cases. Initial Sizes. Three sets of starting sizes were used: same (all centers are equal in size), Zage, and small. In the case of large and small sizes, sizes were assigned to centers on a purely arbitrary basis. The three sets of sizes were constructed with reference to mean equilibrium sizes when fixed cost and population parameters are equal to zero. Thus for

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Geographical Analysis

both the same and the small starting sizes, the average size is less than the average equilibrium size, whereas the average initial size of the large sizes is greater than average equilibrium size. The same sizes are used as the standard starting sizes. The other two sets are used primarily to check results based on same sizes for sensitivity to changes in initial sizes. Maps. Seven maps were used (Fig. 1). 1. The standard map consists of 20 centers located irregularly on a 50 x 50 grid. The first near neighbor statistic characterizes the configuration as nearly random (R = 1.11)but the map has been constructed so that several spatial situations appear: the lower half has

250

- 200

150

; :l n
0

:
0 0 0

100

- so
0 0 0 0 -

0 0 1

FIG. 1. Maps Showing Configurations of Centers Specified as Initial Conditions

Roger W. White /

233

a generally low density of centers; the upper half, a high density; and the highest density of centers occurs in the small cluster at the center. The coefficient of correlation ( r , ) between aggregate distance to three nearest neighbors and distance to map edge for the centers of the standard map is -0.29. (The significance of r , is explained in the following section.) This is the map on which most of the simulations discussed in the present paper are based. 2. The irregular map is another 50 x 50, 20 center map with centers located irregularly. For this map r , = 0.00. 3. The strip map has dimensions of 10 x 250 (it thus has the same area as the first two maps) and, again, 20 centers. It is a linear counterpart of the standard map: the west half has a high density of centers and the east half, a low density, and there are two noticeable clusters-one near the west end and one near the center. For this map, r = 0.20. 4. The regular map is 60 x 60 and has 25 centers arrangea in a regular rectangular grid pattern. On this map, the aggregate distance to the three nearest neighbors is the same for all centers; thus r , is not calculated. 5-7. Another three maps were created by scale transformations on the standard map in which all distances (except distance from a center 0 to itself) were multiplied in turn by 0.1, 0.5, and 1 . MEASURES THE CENTRAL OF PLACE PATTERN Once a central place pattern is generated by the simulation model, the problem is to find useful ways of characterizing it. What are the relevant features to use to describe it? Several kinds of solutions are possible: measures can be designed that most clearly and systematically distinguish one generated pattern from another, or result in the most distinct set of categories, without regard to considerations external to the model itself; measures facilitating comparison with the results of other models of urban systems, such as the classical central place models, can be developed; or we can choose measures that are useful in comparing the generated pattern with real urban systems (as, for example, in rank-size relationships). Clearly, however, the three approaches are not mutually exclusive. In fact, one test of the model would consist of showing that measures developed in accord with criteria internal to the model itself were also reasonable descriptions of real central place systems. The two measures relied on in the present paper are ones developed specifically to yield simple, clear, and unequivocal characterizations of the simulation results. The first measure is the degree of correlation between size of a given sector at a center and aggregate distance from that center to the three nearest neighboring centers, where each map edge is treated as a center (except on the strip map, where only the ends are so treated). In every case where there is a strong relationship between size and aggregate distance, it is linear. The second measure is the degree of correlation between size of a given sector at a center and distance from the center to the nearest edge of the map (or nearest end, in the case of the strip map). This relationship, too, is usually

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Geographical Analysis

linear. Clearly, the first measure is an indicator of the importance of the local situation of a center, whereas the second is an indicator of the importance to a center of centrality in the region. Since both measures are used on the same central place pattern, the question of multicollinearity arises. For the maps used in the present study, the problem is not serious. Coefficients of correlation between aggregate distance and distance to edge range from r , = 0.00 to r , = -0.29. Neither measure has yet been tested for suitability in describing data from real central place systems, for a number of definitional and methodological problems would have to be solved first.

THESIMULATION RESULTS
What kinds of central place systems are generated, and under what circumstances, by the model2 To answer this question we first discuss simple one-sector systems with zero fixed cost and zero population parameters, designed to reveal both the effect of the interaction parameter and sensitivity to initial conditions; then systems with various positive levels of fixed cost will be examined, and finally systems characterized b y diseconomies and economies of scale are investigated.

Effect of the Interaction Parameter, n The type of central place system generated by the model depends fundamentally on the specification of the interaction equation. For both the gravity formula and the equivalent exponential interaction equation, there is a relatively small transition zone of values for the distance exponent n, such that the kind of central place system generated depends on whether n lies above or below the transition zone. This effect can be seen clearly in Figure 2, which displays the simulation results for three values of n, with three sets of starting sizes each. Graphs in the first row, for which n = 1, show a poor correlation between size and aggregate distance to the three nearest neighbors. At the same time, there is a noticeable association between size and distance to the edge of the map, as indicated by the four categories of symbols plotted. Graphs in the second and third rows, on the other hand, for which n = 2 and n = 3, respectively, show a good correlation between size and aggregate distance, but no relation between size and distance to edge. This distinction is also evident in the regression equations, shown in Table 1 (lines 1-3 and 13-18). Furthermore, in examining that table, it can be seen that there is no single critical value of n that divides the low-exponent patterns from the high-exponent patterns. Rather, there is a gradual transition from one kind of pattern to the other as n increases from 1 to 1.9 (lines 4-12), though the major change occurs between n = 1.2 (line 5) and n = 1.7 (line 10). In general terms, then, in the case of the higher exponents, the local relative location determines the size of a center, whereas in the case of low exponents, the location with respect to the center of the entire

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235

300

"-3
SAME

t "-'
LARQE

zoo

AQQREQAR DISTANCE TO 3 NEAREST NEIBHBOURS

FIG.2. Relationship between Center Size and Aggregate Distance to Three Nearest Neighbors for Nine Single-Sector Systems. Fixed cost = 0, population parameter = 0, standard map; n and initial sizes as indicated. Distance to edge is indicated as follows: 5, circle; 10, triangle; 15, square; 20-22.5, cross.

region is the major determinant of size. This result regarding the role of the distance exponent n is a very strong one, one which is largely independent of the initial sizes of centers, the configuration of the centers, or the form of interaction equations. A comparison of the graphs in each row of Figure 3, or an examination of the corresponding regression equations in Table 1, shows that the results, as they depend on n, are virtually unaffected by the initial sizes of the centers. A change in the configuration of the centers apparently disturbs the results even less than a change in initial sizes: compare the equations for the standard map (lines 1,3,16, 17) with the corresponding equations

TABLE 1 COEFFICIENTS OF THE REGRESSION EQUATION

Exponent and Initial Sizes
VARIABLE

Intercept

Aggregate Distance

Distance to Edge

Mult. R

Part A: Standard M a p and Graoity Equation Standard map

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

n = l Same Large Small

1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 n=2 Same Large Small I1 = 3 Same Large Small
n= n= n= n= n= n= n= n= n=

-222.16 -209.68 -253.42' -225.11 -220.80 -209.17 - 194.76 - 177.46 - 162.29 - 147.69 - 143.35 - 123.72

7.86 7.01 10.34' 8.92 9.72 10.23 10.49 10.52 10.53 10.44 10.47 10.18 10.85 8.93 10.15 9.29 9.29 9.31

14.01 14.67 11.74 12.16 10.18 8.19 6.40 4.86 3.52 2.46" 1.905 (0.92) (0.82) (0.25) (0.24) (-1.89) (-1.89) (- 1.96)

0.93 0.92 0.77 0.93 0.94 0.94 0.95 0.95 0.95 0.95 0.94 0.95 0.95 0.95 0.94 0.91 0.91 0.91

- 135.78
-91.93 - 115.23 -70.40'' -70.43" -70.26"

Part B: Other Maps and Equations Irregular map

n = l
19. Same 20. Small n=3 21. Same 22. Large
Strip map

- 195.46 -212.98'
(-38.99) (-39.42)
(- 19.64) (- 1.76)

7.93 9.28" 10.48 10.50 2.84 2.92

13.66 12.97 (-3.12) (-3.11)

0.97 0.79 0.78 0.78 0.87 0.94 0.95 -0.69 0.94 0.91 0.90 0.91 0.91 0.94 0.95 0.94

23. n = 1 24. n = 3
Regular map

(0.4)
(0.14) 16.50 -5.66 22.90 21.36 15.87 3.67'" 6.67 (1.51) 2.71' (-0.38)

25. n = 1 -5.49 26. n = 3 193.91 Scale: x 0.1, standard map 27. n = 1 -130.21" -210.88' 28. n = 1.5 -280.09 29. n = 2 -207.36 30. n = 3 Scale: x 0.5, standard map 31. n = 1.5 - 187.69 - 147.50 32. n = 2 Scale: x lo, standard map 33. n = 1.5 - 148.56 34. n = 2 -92.13'

n.a. n.a.
(-0.52) (3.72) 9.43 12.39 9.81 10.90 10.35 9.47

Roger W. White /
TABLE 1 (continued)
Exponent and Initial Sizes

237

VARIABLE
Intercept Agmgate Distance Distance to Edge Mult.

Exponential equation 35. n = 0.01 36. n = 0.05 . 37. n = 0 1 38. n = 0.2 39. n = 3

-55.78"
(- 122.22)

-266.46 - 127.55" (-50.57)

(0.42) (-1.37) 10.15 11.51 8.80

14.63 23.93 13.24 (- 1.41) -2.62"

0.97 0.93 0.93 0.85 09 .0

Note: L k r d e n t variable is sector size. Fixed cost = 0. Po ulation parameter = 0. All values are significant at the O.(MM)5 eve1 unless otherwise indicated; figures in parentEeses are not significant at the .05 level. Where no size is shown. initial sizes are same. 'Significant at the 0.005 level; **significant at the 0.05level. The significance tests should be interpreted liberally sincw in the cases of n = 1, 2, and 3. we have three samples each, and thus more information than was used id. the tests.

for the irregular map (lines 19-22). For the regular map, it is not possible to make a direct comparison, since one characteristic of this map is that the aggregate distance to the three nearest neighbors is the same for every center. Nevertheless, the change in size of the regression coefficient' for distance to edge is consistent with the results using the standard and irregular maps. The strip map is an exception: here the configuration does affect the role of the exponent. The equation for n = 1 (line 23) is very similar to that for n = 3 (line 24) and is of the high exponent type: distance to edge is not a significant determinant of center size. There may, however, be values for n sufficiently small that the low exponent type of equation (in which distance to edge is a significant variable) appears. Since in the case of the two-dimensional maps the upper end of the transition zone for n is at n < 2, it seems reasonable to expect that for the one-dimensional map, if a transition zone exists, its upper end will fall at n < 1. Changes of scale on the standard map, as might be expected, do have some effect on the role of n. In general, shrinking distances is equivalent to lowering n, and increasing distances is equivalent to raising n. Changing the scale by multiplying all distances on the map (except distance from a center to itself) by 0.1 is equivalent to lowering the exponent from n = 2 to somewhere in the range n = 1.0 to n = 1.2. Similarly, for n = 3, the scale change is equivalent to a lowering of the exponent to about n = 1.6. When distances are multiplied by 0.5, the effect is much smaller. Multiplying distance by 10 has the opposite effect, equivalent to raising n, but the effect is very slight.
'The equations for the regular map are shown only in order to permit some sort of comparison. In fact, both relationships are curvilinear, and polynomial equations would appear to be the more appropriate.

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50

n = l
0

n = l

n = l

FIG.3. Equilibrium Pattern of Centers for Nine Single-Sector Systems. Fixed cost = 30, population parameter = 0, initial sizes as indicated. Area of circle is proportional to size of center.

An exponential interaction equation (equation 3b) was substituted for the gravity equation, and a number of values of n were tried. As can be seen in Table 1, Part B (lines 35-39), there was again a transition zone for n values, such that for larger n, aggregate distance is the primary determinant of center size, whereas for smaller n, distance to edge is the major determinant. In the case of the exponential equation, however, the transition occurs between n = 0.1 and n = 0.2.' Comparing these results to those obtained using the gravity equation, the equation for n = 0.1 (line 37) is seen to correspond closely to that for n = 1.1 (line 4), whereas the equation for n = 0.2 (line 38) is very similar to that for n = 3 (line 16).Values for n in the exponential equation much larger than n = 0.2 make very little difference in the results (cf. lines 38 and 39, Table 1, Part B).
2The most important factor determining the position of the transition zone seems to be the distance at which interaction values fall to insignificant levels.

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239

Effect of the Fixed Cost Parameter: Threshold Size A glance at Figures 3 and 4 shows the most obvious effect of introducing a nonzero level of fixed cost: some centers are eliminated. This represents the threshold effect. A center must remain large enough to attract enough revenue to cover fixed costs; if it falls below this critical size, it disappears rapidly. The higher the level of fixed cost, the greater the threshold size, and the fewer the number of centers that can survive (cf. Fig. 3, bottom row, and Fig. 4). The exponent n is also an important determinant of the number of centers to survive (Fig. 3). Furthermore, n is effective in determining not only how many centers survive, but which ones; thus it has a direct effect on the locational pattern. In particular, the findings for the case of zero fixed costs regarding the relative importance of aggregate distance and distance to edge for different values of n remain relevant. But with a nonzero level of fixed cost, they must be interpreted to refer more to center survival than to center size. For n = 1 there appears to be a tendency for the surviving centers to be in the central part of the map (Fig. 3, first row). This result is to be expected on the basis of the results with zero fixed cost, since in that case distance from edge was the most important determinant of center size for n = 1. In the case of n = 2, the surviving centers are relatively evenly spaced on the map. Since for n = 2 it was found that center size depends only on aggregate distance to the three nearest neighbors-in other words, that spatial competition is largely with local centers-it is not surprising that with some centers falling below their threshold size, the surviving centers tend to be ones maximally removed from each other. Maximal distance, of course, implies regular spacing. If for n = 2 size is determined by aggregate distance, it is to be expected that relatively regularly spaced centers will be similar in size. This expectation is confirmed. For the three cases, same (Fig. 3, second row; left), large (center) and small (right), the ratio of size of largest center to size of smallest is, respectively,

n=3
SAME
50

n = 3
LARQE

n = 3
SMALL

lo
to center size.

1
3

FIG.4. Equilibrium Pattern of Centers for Three Single-Sector Systems. Fixed cost = 100, n = 3, population parameter = 0, initial sizes as indicated. Area of circle is proportional

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2.8:1, 3.2:1, and 2.3:1.3 For the corresponding cases with zero fixed cost, the ratios are on the order of 1 O : l (See Fig. 2). The cases for n = 3 (Fig. 3, bottom row) are generally like those for n = 2, but since fewer centers were eliminated, the final pattern still resembles the initial map of 20 centers. Nevertheless, the patterns are more regular than the original ones: in terms of the first near neighbor statistic, R = 1.46 for same (Fig. 1, bottom left) and R = 1.47 for large and small (bottom center and right); by comparison, for the original map, R = 1.11. In the three cases with fixed cost equal to 100 and n = 3 (Fig. 4), the centers are again widely and fairly regularly spaced. But there is considerable difference in detail among the three maps in terms of which particular centers are present. By contrast, the corresponding maps for fixed cost = 30 are identical (Fig. 3, bottom row). This variability reflects the difference in the relative starting sizes of the various centers in the three cases. However, in each case the expected relationship between size and aggregate distance continues to hold.
Effect of the Marginal Cost Parameters: Economies and Diseconomies of Scale In the cost equation (2) the two parameters c j and m . together deter= mine marginal cost, since MCij = d C i j / d S i j c m Srn;-'. The role of each parameter was, however, examined separateiy .j ii In the first case, m was set equal to unity, so that M C , = ci; that is, there are constant returns to scale. The results are not surprising. Decreasing the rate (c,) at which costs increase as size increases results in a greater range of sizes at equilibrium, and conversely (Table 1, lines 8 and 13, and Table 2, lines 1-4). In the second case, ci was set equal to unity so that M C , = m i S T - ' . Clearly, the effect of the cost exponent m depends on whether its value is greater or less than one -that is, on whether diseconomies or economies of scale (or urbanization) are being modeled. In the case of diseconomies of scale ( m > l), a comparison of Table 2 (lines 3-5) with Table 1 (line 8) shows that the major effect on the central place pattern is again that the range of sizes decreases as m increases. It might also be expected that higher values of the cost exponent would affect the pattern of results as it depends on the distance exponent n. In particular, it would seem reasonable to find that increasing the diseconomies of scale (increasing m ) would have an effect much like that of lowering the order of good (increasing n ) , at least in the critical intermediate range of values for n. However, there is little indication of such an effect (cf. lines 6, 8, and 10 of Table 2 with lines 1, 8, and 10 of Table 1). In the case of economies of scale ( m < 1) the results cannot be
3This ratio was calculated excluding the small center at (45, 15) which is about to disappear.

Roger W. White /
TABLE 2

241

COEFFICIEXTS REGRESSION OF THE EOUATION SYSTEMS ECONOMIES DISECONOMIES FOR WITH AND OF SCALE
Cmt Coefficient c and Enpcrnents of Distnncv n and Cost Ill

VARIABLE
Intercept Aggregate Distance Distance to Edge Mult.

Linear cost function ( m = 1) n = 1.5 1. c = 0.8 2. c = 1.2 n=2 3. c = 0.8 4. c = 1.2 Nonlinear cost fiinction (c = 1) n= 1 5. m = 1.1 6. m = 1.2 n = 1.5 7. m = 1.1 8. m = 1.2 9. m = 1.5 n = 1.7 10. m = 1.2

-252.27 - 174.84

14.41 9.88 12.76 8.53

6.17 4.13 (0.48) (0.33)

0.94 0.93 0.94 0.94

- 147.68 -99.11

-52.19 -6.23 -47.43 - 10.84 7.33

3.11 1.49 4.34 2.22 0.57 2.43

5.08 2.29 2.23 1.23 0.34 0.78'

0.97 0.97 0.97 0.96 0.94 0.95

- 10.53

Note: Dependent variable is sector size. Fixed cost = 0. Population parameter = 0. All values are significant at the 0.oWS level unless otherwise indicated; figures in parentheses are not significant at the 0.05 level. Initial sizes are sanie. 'Significant at the 0.005 level.

characterized by a regression equation, because some centers are effectively eliminated. Furthermore, with low values for the cost exponent, convergence is extremely slow, so it is not as a rule feasible to continue calculations until something approaching equilibrium is attained. In general it is not possible to say how many centers are eliminated in various situations. However, two systems were followed until equilibrium was approached. In the first case (n = 1.7, m = 0.8), after some 600 iterations the system consisted of two centers of unequal size, both near the center of the map, a result consistent with the low-n pattern. Apparently it is possible for competing centers to survive under a regime of economies of scale or urbanization. Perhaps more surprising was the complex behavior of this system before equilibrium was attained. One center maintained a nearly constant size for 150 iterations, whereas neighboring centers grew and declined. I n the second case (n = 2, m = 0.8), eleven centers were ultimately eliminated, but the remaining nine were evenly distributed, a result consistent with the high-n pattern. Perhaps the most important result regarding the effect of a nonlinear cost function is simply the indication that the presence of diseconomies or economies of scale does not fundamentally alter the behavior of the system as it depends on the interaction parameter n.

242 /

Geographical Analysis

CONCLUSIONS
The simulation results presented in the last section, taken together, constitute a guide to the behavior of the model under various circumstances. The most striking feature of the behavior of the model is its essential simplicity. In spite of the complexity of the model itself, and the number of parameters that might be expected to affect the results, the nature of the central place systems generated depends fundamentally only on the interaction parameter n. For low values of n (roughly n I1) the centrality of a center with respect to the entire map area is the primary determinant of center size, with distance to neighboring centers a secondary factor. For high values of n (roughly n 2 2), distance to neighboring centers is the only determinant of center size. When fixed costs are set at levels appreciably greater than zero, or when economies of scale are introduced, some centers are eliminated, and so the center size effects are translated into loetion pattern effects: for low values of n, centers tend to be few and concentrated in the middle of the map area, whereas for high values of n, centers are dispersed, relatively evenly spaced, and of roughly similar size. These results are largely independent of the initial sizes and locations of centers. Thus the basic premise of the dynamic central place theory, that the economic characteristics of tertiary activities and the spatial behavior of consumers together determine the form and structure of the central place system, is supported. The results are highly gratifying, for in most empirical investigations of spatial interaction using a gravity equation, the distance exponent n has been found to lie within the range 1 <n < 3, with low values of n generally associated with high-order goods or activities and high values of n with low-order goods. Furthermore, there is a generally observed tendency for establishments offering high-order goods (low n ) to cluster, and frequently to cluster in the center of the region (the CBD is usually centrally located in the city), and for establishments offering low-order (high n ) goods to be widely dispersed and relatively sensitive to local competition. Thus there appears-to be a very general correspondence between the simulation results and the real phenomena. In conclusion, judged on internal grounds, the dynamic central place theory, formulated as a simulation model, appears quite promising. A future paper will present a first empirical test, one based on rank-size and other distributions generated in systems characterized by centers with two tertiary sectors (high and low order) and populations dependent on sector size.
LITERATURE CITED
1. BEHHY, BHIAN L., and J. GARDINER J. BARNUM. gregate Relations and Elemental A Components of Central Place Systems. Journal of Segional Science, 4 (1962), 35-68. 2. BERRY, BRIAN . L., and WILLIAM GARRISON. Functional Bases of the Central L. The ! Place HierarcI y. Economic Geography, 34 (1958), 145-54.

Roger W. White
3.
4. 5. 6. 7.

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-A .

8.
9.

Note on Central Place Theory and the Range of a Good. Economic Geography, 34 (1958), 304-11. -Recent Developments of Central Place Theory. Papers and Proceedings of . the Regional Science Association. 4 (1958), 107-20. MORRILL, RICHARD Simulation of Central Place Patterns over Time. In Proceedings L. of the ZGU Sym osium in Urban Geography, Lund, 1960, edited by h u t Norborg, pp. 109-20. Luncf C. W. K. Gleerup, 1962. OLSSON, GUNNAFI. Distance and Human Interaction. Philadelphia: Regional Science Research Institute, 1965. RUSHTON~,GERARD. Postulates of Central Place Theory and Properties of Central Place Systems. Geographical Analysis, 3 (1971), 140-56. WHITE, Sketches of a Dynamic Central Place Theory. Economic Geography, 50 R. (1974), 219-27. -Simulating the Dynamics of Central Place Systems. Proceedings of the . Association of American Geographers, 7 (1975), 279-82.