<P> Although later used in the context of urban analysis , though not yet using this term , the bid rent theory was first developed in an agricultural context . One of the first theoreticians of bid rent effects was David Ricardo , according to whom the rent on the most productive land is based on its advantage over the least productive , the competition among farmers ensuring that the full advantages go to the landlords in the form of rent . This theory was later developed by J.H. von Thünen , who combined it with the notion of transport costs . His model implies that the rent at any location is equal to the value of its product minus production costs and transport costs . Admitting that transportation costs are constant for all activities , this will lead to a situation where activities with the highest production costs are located near the marketplace , while those with low production costs are farther away . </P>
<P> Although later used in the context of urban analysis , though not yet using this term , the bid rent theory was first developed in an agricultural context . One of the first theoreticians of bid rent effects was David Ricardo , according to whom the rent on the most productive land is based on its advantage over the least productive , the competition among farmers ensuring that the full advantages go to the landlords in the form of rent . This theory was later developed by J.H. von Thünen , who combined it with the notion of transport costs . His model implies that the rent at any location is equal to the value of its product minus production costs and transport costs . Admitting that transportation costs are constant for all activities , this will lead to a situation where activities with the highest production costs are located near the marketplace , while those with low production costs are farther away . </P>
who came up with the bid rent theory
who came up with the bid rent theory
David Ricardo
David Ricardo