national regions. This classification is then used to identify and examine the distribution of these
regions throughout the geography of the integrated European common market. This allows for the
identification of the EU geographic core, the individual EU core regions, the adjacent regions, and the
EU geographic periphery.
4.1 The Theory Underlying the CAP Model
The development of the CAP model employs two traditional themes of regional economics.
The first, is von Thünen’s (1842) concentric circle theory of cultivation. The second, is the theoretical
nomenclature used by regional economists to describe region types (Paelinck and Nijkamp, 1975). The
CAP model is a synthesis of these traditional lines of thought.
The CAP model differs from the Venables and Limao’s (2002) Heckscher-Ohlin-von Thünen
theoretical model in a number of ways. One, the CAP model is a national regional model and not a
multi-country model. Two, the CAP model is a seamless geographic world of regions and not of
‘disconnected’ countries. Three, the CAP model assumes interregional labour mobility, and not
intercountry labour immobility. Four, the CAP model is a framework for measuring the endogenous
forces of economic geography in a world of imperfect competition.
The similarites of the CAP model with the Venables and Limao (2002) model pertain to: one,
the inverse relationship between distance from the core and the income received for production
activity; and, two, the appropriate analytical framework provided by the CAP model to examine the
interaction of two types of region characteristics with two types of commodity characteristics.
Von Thünen’s (1842) concentric circle theory of cultivation locates production activity across
three geographic areas consisting of: a populated urban area that serves as the consumption and
manufacturing core, and a first and second ring of regions where agricultural production is located.
Von Thünen illustrated that the transportion costs of market access reduce the level of rental incomes,
in direct relation to the distance between the location of production activity and the core region. The
further production activity is located away from the core region, the lower the level of wages and
incomes received will be.