economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes ...

, 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 the planet Earth that is not submerged by the ocean or other bodies of water. It makes up 29% of Earth's surface and includes the continents and various isla ...

. Examples include particular

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

mineral deposit Ore is natural rock or sediment that contains one or more valuable minerals, typically containing metals, that can be mined, treated and sold at a profit.Encyclopædia Britannica. "Ore". Encyclopædia Britannica Online. Retrieved 7 April ...

s, forests, fish stocks, atmospheric quality, geostationary orbits, and portions of the

electromagnetic spectrum The electromagnetic spectrum is the range of frequencies (the spectrum) of electromagnetic radiation and their respective wavelengths and photon energies. The electromagnetic spectrum covers electromagnetic waves with frequencies ranging fro ...

. 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 utilized amounts of the various inputs determine the quantity of output according to the rel ...

(also sometimes called the three producer goods) along with capital, 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 la ...

. 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 stati ...

of all

goods In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not t ...

, including capital goods. While the particular role of land in the economy was extensively debated in classical economics 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 good ...

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.

Ownership

Because no man created the land, it does not have a definite original proprietor, owner or user. As a consequence, 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 is a form of agrarian reform involving the changing of laws, regulations, or customs regarding land ownership. Land reform may consist of a government-initiated or government-backed property redistribution, generally of agricultural ...

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

Addressing the land question

Land reform

Land reform Land reform is a form of agrarian reform involving the changing of laws, regulations, or customs regarding land ownership. Land reform may consist of a government-initiated or government-backed property redistribution, generally of agricultural ...

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

Georgism

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

hold that this implies a perfectly

inelastic In economics, elasticity measures the percentage change of one economic variable in response to a percentage change in another. If the price elasticity of the demand of something is -2, a 10% increase in price causes the demand quantity to fall ...

supply curve (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. It is also known as a location value tax, a point valuation tax, a site valuation ta ...

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).

Significance

Land plays an important 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 important role in the economy than capital.

Academic

Some United Kingdom and commonwealth 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.

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 ...

land is represented in accounting as a

fixed asset A fixed asset, 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. Fixed assets are different from current assets, such as cash ...

or a

capital asset A capital asset is defined as property of any kind held by an assessee, whether connected with their business or profession or not connected with their business or profession. It includes all kinds of property, movable or immovable, tangible or i ...

Sustainability

The sustainable use of land is the focus of some economic theories.