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bid rent theory
The bid rent theory is a geographical economic theory that refers to how the price and demand for real estate change as the distance from the central business district (CBD) increases. It states that different land users will compete with one another for land close to the city center. This is based upon the idea that retail establishments wish to maximize their profitability, so they are much more willing to pay more for land close to the CBD and less for land further away from this area. This theory is based upon the reasoning that the more accessible an area (i.e., the greater the concentration of customers), the more profitable.
==Explanation==
Land users all compete for the most accessible land within the CBD. The amount they are willing to pay is called "bid rent". The result is a pattern of concentric rings of land use, creating the concentric zone model.
It could be assumed that, according to this theory, the poorest houses and buildings would be on the very outskirts of the city, as this is the only location that they can afford to occupy. In modern times, however, this is rarely the case, as many people prefer to trade off the accessibility of being close to the CBD and move to the edges of a settlement, where it is possible to buy more land for the same amount of money (as the bid rent theory states). Likewise, lower-income housing trades off greater living space for increased accessibility to employment. For this reason, low-income housing in many North American cities, for example, is often found in the inner city, and high-income housing is at the edges of the settlement.
抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』
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