Alonso’s Location and Land Use: the 1964 book behind the bid-rent curve
In 1964 Harvard University Press published William Alonso’s theory of how households, firms and farms compete for land around a city centre. A 2023 OECD housing report cites the book as a founding source of the monocentric city model.
What the study did and found
The book is “Location and Land Use: Toward a General Theory of Land Rent” by William Alonso, published by Harvard University Press in 1964. It grew out of his 1960 doctoral thesis at the University of Pennsylvania.
Across six chapters the book builds from one household to a whole market. The household chooses plot size and distance from the centre together on a fixed income; later chapters derive bid-price curves for farms, firms and homes and a market equilibrium that shares land among them. Empirical work is only outlined.
Why it is cited
The one referring page recorded here is chapter 2 of the OECD/KIPF report Bricks, Taxes and Spending (2023), on housing demand after the onset of COVID-19. It says the monocentric model of Alonso, Mills (1967) and Muth (1969), “despite its simplicity”, “correctly predicts fundamental forces underlying urban form”, and tests it on housing data from 13 OECD countries.
The citation fits, since the book is a founding statement of that model, but “correctly predicts” rests on later evidence, not on the book itself.
The book is theory built on strong simplifications: one employment centre, tastes taken as given and households treated as economic calculators.
Later work broadly supports its core gradient: OECD data confirm that house prices tend to fall with distance, though New York’s average home prices peak 5–10 km out, and a 2015 handbook review calls the simplest monocentric model a reasonable first-order description of many cities, yet “extremely crude”.
The topic today
Remote working has changed the price of distance in Alonso’s trade-off. After the pandemic began in 2020, prices and rents in most US metropolitan areas fell in city centres and rose further out, flattening the bid-rent curve. In Great Britain, 24% of working adults both worked from home and travelled to work in August 2026.
For the current picture, see our explainer Why Homes Get Cheaper Further Out: Alonso’s 1964 Model.