Land (economics)
In
economics,
land comprises all naturally occurring resources whose supply is inherently fixed, such as geographical locations (excluding
infrastructural improvements and perhaps
natural capital, which can be degraded by human actions),
mineral deposits, and even
geostationary orbit locations and portions of the
electromagnetic spectrum. In
classical economics it is considered one of three
factors of production, the other two being
capital and
labor; income deriving from this is often referenced as
rent.
Land in the economic sense of the term is not produced or destroyed.
Georgists hold that this implies a perfectly
inelastic supply curve, suggesting a so-called
land value tax would not affect the
opportunity cost of using land, but would instead decrease the value of legal land ownership. However, land can come on and off the market, and must be discovered to be put to use. Also, mineral deposits are depleted by extraction (see
Hotelling rent), thus they might be excluded from the definition of land.
Land, particularly geographic locations and mineral desposits, has historically been the cause of much conflict and dispute;
land reform programmes, which are designed to redistribute geographic land, are often the cause of much controversy and mineral deposits have contributed to many civil wars, particularly in
Africa.
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Economic rent*
Positional good
