Johann Heinrich von Thünen

Who was Johann Heinrich von Thünen?

Johann Heinrich von Thünen was a prominent nineteenth century economist. Von Thünen was a Mecklenburg landowner, who in the first volume of his 1826 treatise The Isolated State, developed the first serious treatment of spatial economics and Economic geography, connecting it with the theory of rent. The importance lies less in the pattern of land use predicted than in its analytical approach.

Von Thünen developed the basics of the theory of marginal productivity in a mathematically rigorous way, summarizing it in the formula in which

where R=land rent; Y=yield per unit of land; c=production expenses per unit of commodity; p=market price per unit of commodity; F=freight rate; m=distance to market.

The Von Thünen model of agricultural land, created before industrialization, made the following simplifying assumptions:

The city is located centrally within an "Isolated State."

The Isolated State is surrounded by wilderness.

The land is completely flat and has no rivers or mountains.

Soil quality and climate are consistent.

Farmers in the Isolated State transport their own goods to market via oxcart, across land, directly to the central city. There are no roads.