In economics, land comprises all naturally occurring resources as well as geographic land. Examples include particular geographical locations, mineral deposits, forests, fish stocks, atmospheric quality, geostationary orbits, and portions of the electromagnetic spectrum. Supply of these resources is fixed.
Natural resources are fundamental to the production of all goods, including capital goods. Location values are not be confused with values imparted by fixed capital improvements. In classical economics, land is considered one of the three factors of production (also sometimes called the three producer goods) along with capital, and labor. Land is sometimes merged with capital to simplify micro-economics. However, a common mistake is combining land and capital in macro-analysis.
Land was sometimes defined in classical and neoclassical economics as the "original and indestructible powers of the soil."
Ownership and rent
Income derived from ownership or control of natural resources is referred to as rent.
Georgists hold that this implies a perfectly inelastic supply curve (i.e., zero elasticity), suggesting that a land value tax that recovers the rent of land for public purposes would not affect the opportunity cost of using land, but would instead only decrease the value of owning it. This view is supported by evidence that although land can come on and off the market, market inventories of land show if anything an inverse relationship to price (i.e., negative elasticity).
Land, particularly geographic locations and mineral deposits, has historically been the cause of much conflict and dispute; land reform programs, which are designed to redistribute possession and/or use of geographic land, are often the cause of much controversy, and conflicts over the economic rent of mineral deposits have contributed to many civil wars.
Some United Kingdom and common wealth universities offer a courses in land economy, where economics is studied alongside law, business regulation, surveying and the built and natural environments. This mode of study at Cambridge dates back to 1917 when William Cecil Dampier suggested the creation of a school of rural economy at the university.
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