The Von Thunen model of agricultural land use (also called location theory) was created by the German farmer, landowner, and amateur economist Johann Heinrich Von Thunen (1783–1850). He presented it in 1826 in a book called "The Isolated State," but it wasn't translated into English until 1966.
Von Thunen created his model before industrialization and in it, he laid the foundation for what we know as the field of human geography. He strove to identify trends of people's economic relationship with the landscape surrounding them.
The Von Thunen model is a theory which, after Von Thunen's own observations and very meticulous mathematical calculations, predicts human behavior in terms of landscape and economy.
Like any other scientific experiment or theory, it is based on a series of assumptions, that Von Thunen sums up in his concept of an "Isolated State." Von Thunen was interested in ways people tend to use and would use the land around a city if the conditions were laboratory-like, as in his Isolated State.
His premise is that if people have the freedom to organize the landscape around their cities as they wish, they will naturally set up their economy—growing and selling crops, livestock, timber, and produce— into what Von Thunen identified as "Four Rings."
The following are the conditions Von Thunen noted as the basis for his model. These are laboratory-style conditions and don't necessarily exist in the real world. But they are a workable basis for his agricultural theory, which seemed to reflect how people actually organized their world and how some modern agricultural regions are still laid out.
In an Isolated State with the foregoing statements being true, Von Thunen hypothesized that a pattern of rings around the city would develop based on land cost and transportation cost.
Beyond the fourth ring lies the unoccupied wilderness, which is too great a distance from the central city for any type of agricultural product because the amount earned for the product doesn't justify the expenses of producing it after transportation to the city is factored in.
Even though the Von Thunen model was created in a time before factories, highways, and even railroads, it is still an important model in geography. It is an excellent illustration of the balance between land cost and transportation costs. As one gets closer to a city, the price of land increases.
The farmers of the Isolated State balance the cost of transportation, land, and profit and produce the most cost-effective product for the market. Of course, in the real world, things don't happen as they would in a model, but Von Thunen's model gives us a good base to work from.