economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...

, land comprises all naturally occurring resources as well as geographic

land Land, also known as dry land, ground, or earth, is the solid terrestrial surface of Earth not submerged by the ocean or another body of water. It makes up 29.2% of Earth's surface and includes all continents and islands. Earth's land sur ...

. Examples include particular

geographical location In geography, location or place is used to denote a region (point, line, or area) on Earth's surface. The term ''location'' generally implies a higher degree of certainty than ''place'', the latter often indicating an entity with an ambiguous bou ...

mineral deposit Ore is natural rock or sediment that contains one or more valuable minerals, typically including metals, concentrated above background levels, and that is economically viable to mine and process. The grade of ore refers to the concentration ...

s, forests, fish stocks, atmospheric quality,

geostationary orbit A geostationary orbit, also referred to as a geosynchronous equatorial orbit''Geostationary orbit'' and ''Geosynchronous (equatorial) orbit'' are used somewhat interchangeably in sources. (GEO), is a circular orbit, circular geosynchronous or ...

s, and portions of the

electromagnetic spectrum The electromagnetic spectrum is the full range of electromagnetic radiation, organized by frequency or wavelength. The spectrum is divided into separate bands, with different names for the electromagnetic waves within each band. From low to high ...

. Supply of these resources is fixed.

Factor of production

Land is considered one of the three

factors of production In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilised amounts of the various inputs determine the quantity of output according to the rela ...

(also sometimes called the three producer goods) along with

capital Capital and its variations may refer to: Common uses * Capital city, a municipality of primary status ** Capital region, a metropolitan region containing the capital ** List of national capitals * Capital letter, an upper-case letter Econom ...

, and

labor Labour or labor may refer to: * Childbirth, the delivery of a baby * Labour (human activity), or work ** Manual labour, physical work ** Wage labour, a socioeconomic relationship between a worker and an employer ** Organized labour and the labour ...

. Natural resources are fundamental to the

production Production may refer to: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (goods and services) * Production as a stat ...

of all

goods In economics, goods are anything that is good, usually in the sense that it provides welfare or utility to someone. Alan V. Deardorff, 2006. ''Terms Of Trade: Glossary of International Economics'', World Scientific. Online version: Deardorffs ...

, including

capital goods In economics, capital goods or capital are "those durable produced goods that are in turn used as productive inputs for further production" of goods and services. A typical example is the machinery used in a factory. At the macroeconomic level, ...

. While the particular role of land in the economy was extensively debated in

classical economics Classical economics, also known as the classical school of economics, or classical political economy, is a school of thought in political economy that flourished, primarily in Britain, in the late 18th and early-to-mid 19th century. It includ ...

it played a minor role in the

neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption, and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a go ...

dominant in the 20th century. Income derived from ownership or control of

natural resources Natural resources are resources that are drawn from nature and used with few modifications. This includes the sources of valued characteristics such as commercial and industrial use, aesthetic value, scientific interest, and cultural value. ...

is referred to as

rent Rent may refer to: Economics *Renting, an agreement where a payment is made for the temporary use of a good, service or property *Economic rent, any payment in excess of the cost of production *Rent-seeking, attempting to increase one's share of e ...

Ownership

Because no man created the land, it does not have a definite original proprietor, owner or user. Consequently, conflicting claims on geographic locations and mineral deposits have historically led to disputes over their economic rent and contributed to many civil wars and revolutions. In the context of geographic locations the resulting conflict is regularly understood as the

land question Land reform (also known as agrarian reform) involves the changing of laws, regulations, or customs regarding land ownership, land use, and land transfers. The reforms may be initiated by governments, by interested groups, or by revolution. Land ...

(see e.g. United Kingdom, South Africa, Canada).

Addressing the land question

Land reform

Land reform Land reform (also known as agrarian reform) involves the changing of laws, regulations, or customs regarding land ownership, land use, and land transfers. The reforms may be initiated by governments, by interested groups, or by revolution. Lan ...

programs are designed to redistribute possession and/or use of geographic land.

Georgism

Georgists Georgism, in modern times also called Geoism, and known historically as the single tax movement, is an economic ideology holding that people should own the value that they produce themselves, while the economic rent derived from land—includ ...

hold that this implies a perfectly inelastic

supply curve In economics, supply is the amount of a resource that firms, producers, labourers, providers of financial assets, or other economic agents are willing and able to provide to the marketplace or to an individual. Supply can be in produced goods, ...

(i.e., zero elasticity), suggesting that a

land value tax A land value tax (LVT) is a levy on the value of land (economics), land without regard to buildings, personal property and other land improvement, improvements upon it. Some economists favor LVT, arguing it does not cause economic efficiency, ec ...

that recovers the rent of land for public purposes would not affect the

opportunity cost In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives. Assuming the best choice is made, ...

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).

Significance

Land plays a vital role in advanced economies. In the UK, the "non-produced asset of land" accounts for 51% of the country's total net worth, implying that it plays a more critical role in the economy than capital.

Academic

Some United Kingdom and commonwealth universities offer 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 Sir William Cecil Dampier FRS (born William Cecil Dampier Whetham) (27 December 1867 – 11 December 1952) was a British scientist, agriculturist, and science historian who developed a method of extracting lactose (milk sugar) from whey. H ...

suggested the creation of a school of rural economy at the university.

Accounting

As a tangible

asset In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can b ...

, land is represented in accounting as a

fixed asset Fixed assets (also known as long-lived assets or property, plant and equipment; PP&E) is a term used in accounting for assets and property that may not easily be converted into cash. They are contrasted with current assets, such as cash, bank ac ...

or a

capital asset A capital asset is defined as property of any kind held by an assessee. It need not be connected to the assesse’s business or profession. The term encompasses all kinds of property, movable or immovable, tangible or intangible, fixed or circula ...

Sustainability

The

sustainable Sustainability is a social goal for people to co-exist on Earth over a long period of time. Definitions of this term are disputed and have varied with literature, context, and time. Sustainability usually has three dimensions (or pillars): env ...

use of land is the focus of some economic theories.