Johann Heinrich von Thünen (24 June 1783 – 22 September 1850), sometimes spelled Thuenen, was a prominent nineteenth-century economist and a native of Mecklenburg-Strelitz, now in northern Germany.
Even though he never held a professorial position, Thünen had substantial influence on economics. He has been described as one of the founders of agricultural economics and economic geography. He made substantial contributions to economic debates on rent, land use, and wages.
Johann Heinrich Von Thünen was born on 24 June 1783 on his father's estate, Canarienhausen. His father was from an old feudal family, and died when Thünen was two. His mother remarried a merchant and the family moved to Hooksiel.
Thünen expected to take over his father's estate, which led him to study practical farming. In 1803, he published his first economic ideas.
He was influenced by Albrecht Thaer.
Model of agricultural land use
Thünen was a Mecklenburg landowner, who in the first volume of his treatise The Isolated State (1826), developed the first serious treatment of spatial economics and economic geography, connecting it with the theory of rent. The importance lies less in the pattern of land use predicted than in its analytical approach.
Thünen developed the basics of the theory of marginal productivity in a mathematically rigorous way, summarizing it in the formula in which
{\displaystyle R=Y(p-c)-YFm\,}
where R = land rent; Y = yield per unit of land; c = production expenses per unit of commodity; p = market price per unit of commodity; F = freight rate (per agricultural unit, per mile); m = distance to market.
Thünen's model of agricultural land, created before industrialization, made the following simplifying assumptions:
The city is located centrally within an "Isolated State."
The Isolated State is surrounded by wilderness.
The land is completely flat and has no rivers or mountains.
Soil quality and climate are consistent.
Farmers in the Isolated State transport their own goods to market via oxcart, across land, directly to the central city. There are no roads.
Farmers behave rationally to maximize profits.
The use which a piece of land is put to is a function of the cost of transport to market and the land rent a farmer can afford to pay (determined by yield, which is held constant here).