The neoclassical economic model of population and land use originates from von Thünen's theory of agricultural land use, wherein the “highest and best use” of land depends on the cost of transporting the various crops it can yield to a central marketplace. Because different candidates (crops) have different transport costs—and offsetting market values—those with relatively high (low) transport costs end up being produced close to (far from) the marketplace. So, for example, if tomatoes cost more to transport than wheat, tomato farmers will outbid wheat farmers for locations adjacent to the marketplace.

In the 1960s, William Alonso, Edwin Mills, and Richard Muth (jointly credited but working independently) generalized the Thünen theory of agricultural land use to a theory of modern human settlement patterns. The framework describes ...