The setting of the novel is important, in part, because it provides a great cover for Gatsby and Daisy's affair. It also symbolizes the social strata in this society. It is also important to the plot of the novel; Nick came "East" because he returned from the Great War a bit disillusioned with his home and in need of some place new.  

Daisy can go to West Egg, the less fashionable of the two Eggs, to conduct her affair with Gatsby because it seems so far away from any place that her husband would willingly go himself.  In considering its residents beneath his notice, Tom makes it a relative safe haven for his wife to meet her lover. 

The tension between Tom and Gatsby is also dramatized by their respective homes: Gatsby might be able to acquire wealth equal to Tom's, but he cannot change his status (something he never really grasps).  He can become rich, but he cannot become "old money."  Further, the difference between Wilson and Gatsby is also dramatized by their homes: Wilson works so hard and can never get ahead or achieve the American Dream, and Gatsby can achieve something that looks like the American Dream but is not because he has had to engage in criminal activity to acquire it.  Their experiences in both of these locations helps us to understand that such a dream is a fiction. 

Finally, Nick says that he "came back [from the war] restless," looking for more than what the Midwest offered him.  Ironically, the place he thought might help him move on actually turns out to be the place that reinforces the disillusionment he now feels with the world.  In the East, he learns how "careless" people can be with one another.  He saw senseless death in the war, and he sees it again in New York.  This makes this place seem savage and dark in ways that reinforce the book's themes.

There are four major settings in the novel: East Egg (EE); West Egg (WE); the Valley of Ashes (VOA); New York City (NYC). Within each setting are two or more subsettings: East Egg – Daisy’s house; West Egg – Nick and Gatsby’s house; Valley – Wilson’s garage, the famous sign; Michaelis’ restaurant; NYC, Tom’s rented apartment, where people work; the Plaza Hotel. Each setting reflects and determines the values of the people who live or work there and also forms contrasts between settings. EE represents ‘old money’; the idle rich. WE represents vulgar ‘new money’; lack of ‘social credentials. The VOA, characterized by dust, is where the poor live and where the city’s ashes are dumped – a place of spiritual dryness (Dr. E’s eyes). The inhabitants are literally ‘dumped on’ by the rest of the world. NYC symbolizes what America had become in the 1920’s: a morally bankrupt place – a place inhabited by colorful and bizarre people, a place where the World Series could be fixed; lavish parties and affairs happened, and anything went. The idea of setting as moral geography is further reinforced by the overriding symbolism of the American East and the American Midwest which frames the novel as a whole.

The setting is important in this classic novel for several reasons. Tom, Daisy, Gatsby, and Nick are all out of place where they are. They have all been uprooted, all moved in search of some better destiny, or, in Gatsby's case, a whole new life. This indicates the rootlessness of American life, and the threat this mobility carries to character. They are specifically in the East, rather than the Midwest, and this is traditionally the older, more corrupt part of the story. At specific times, the setting is even more directly important: Gatsby's house is large and garish during parties, but touching, because he bought it so he could look across at Daisy's house.

The novel has two important settings, and what is most important about them is the vivid contrast between the two. Jay Gatsby's house is a fantasy playground, more of an "amusement park" for adults than a private home. It is a place of "many-colored, many-keyed commotion" for its visitors and is so renowned as a party spot that many guests come uninvited.

On the other hand, the "valley of ashes" that lies between West Egg and New York City is completely devoid of color and life. Everything in it is gray and lifeless. Myrtle, Tom Buchanan's mistress, lives here and also dies here. When Myrtle's husband travels between the valley of ashes to Gatsby's house, these two worlds collide, and Gatsby's mansion becomes a murder scene as well.

What is the importance of setting to other elements of The Great Gatsby?

The setting of F. Scott's Fitzgerald's The Great Gatsby is intrinsic to the significance of the other elements of the novel. From the onset of the narrative, the setting to the Jazz Age points to the frivolity and amoral conduct of the upper class as the luxurious East Egg demonstrates the snobbery of the upper classes. In contrast, the West Egg indicates the unsubstantiated and dream-like lives of the nouveau riche, those who balance themselves between social success and unrecognition.

Very importantly, Nick Carraway's being from the Midwest indicates his sounder and more centered values against which he views Gatsby, from the West Egg, and Daisy and Tom, from the East Egg, realizing that social conflicts arise because of the Buchanans' wealth and Gatsby's aspiring to have wealth and position. In other words, Scott Fitzgerald employs the West Egg to point to the separation of new money versus old as well as suggesting that Gatsby is not in control of his life and moves toward death (the West) despite his looking toward the green light of East Egg with hope.  In addition, it is the dead valley of ashes that leads to Gatsby's fatal error.  Vainly, he has continued to look longingly at the green light, in the hope that somehow he can attain Daisy.  However, he is forced through the Valley of Ashes, again a foreshadowing of the ride of his "death car."

It is this dismal and moribund atmosphere and setting in which Gatsby dies, his dream unfulfilled and corrupted by money and its associates. The ash-laden George Wilson, also dies. For, their lives have not been genuine; they have been corrupted as they have desired a part of the lives of the arrogant from the East, to partake vicariously in the decadent values of the wealthy, values that are purely materialistic. In the last chapter, Nick observes,

Even when the East excited me most, even when I was most keenly aware of its superiority to the bored, sprawling, swollen towns beyond the Ohio, with their interminable inquisitions which spared only the children and the very old--even then it had always for me a quality of distortion.  West Egg, especially, figures in my more fantastic dreams.  I see it as a night scene by El Greco:  a hundred houses, at once conventional and grotesque, ....

After Gatsby's death the East was haunted for me like that, distorted beyond my eyes' power of correction.

Thus, Nick is left with an emptiness after the deaths of Myrtle Wilson and Gatsby as well as Daisy's careless abandonment of Gatsby, who lived "too long with a single dream" of her and all the others who did not attend his funeral. It is the hollowness of characters that prompts Nick to tell Gatsby, "They're a rotten crowd....You're worth the whole...bunch together!"

Indeed, the setting, an empty one, expresses the illusionary theme of the American Dream.  For, as critic Cassie E. Hermanson writes, Fitzgerald's setting is often metaphorical, transcending time and place.  Gatsby's car seems mythological, his character is compared to Trimalchio with all his "intimate" parties of hundreds of people.  But, in truth, Gatsby is the most genuine of all.