A model developed by Alonso in the 1960s to explain the paradox observed in many cities that poor people tend to live close to the city centre on high-value land, while the rich occupy cheaper land close to the city margins (see bid-rent curve, urban density gradient). The explanation is based on the assumption that the income of a household is consumed by three basic costs: (i) subsistence (food, etc.); (ii) housing and (iii) commuting (assuming that, for most people, their place of work is located in or near the city centre). Poor households can make a saving on these costs by: opting for an inner-city residential location (so as to be close to their work); limiting the amount of high-cost space occupied (i.e. by living at high densities); occupying older and often substandard housing, and by accepting multifamily occupation of dwellings. Conversely, rich families are assumed to have large space requirements. Because they can afford higher commuting costs, they are also able to purchase large amounts of the lower-value land to be found at the edge of the city.