Demographic analysis methods help to provide planners with an insight into certain development tendencies related to the settlement pattern. The method only provides a limited insight into these since it does not indicate how functions are related to each between the settlements and the agglomeration economies. Agglomeration economies are important in development. The range of services being offered and the economic opportunities that exist are all essential elements required to stimulate economic growth and development.
Access to market outlets, access to labour and other essential services helps to reduce the costs of production and increases income and eventually welfare. Easy access to roads has proved to be an important ingredient in developing rural areas in a country since reduced transportation costs and actual access to markets determines the variety, the quality and the prices of goods and services as a minimum aggregated buying power is needed to create sufficient demand for the supply of certain goods and services.
Functional analysis method is an approach through which planners can gain a deeper insight into issues such as:
- Classification of settlements patterns according to functions.
- Level of adequateness of functions in particular settlements.
- Levels of deficiency of functions or settlements where improvements in functions can be undertaken.
- Settlements that offer the potential of being upgraded to higher order settlements.
- Settlements fulfilling threshold values required to support basic services and facilities.