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 locations, mineral deposits, 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, and labor. Natural resources are fundamental to the production 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. 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 is referred to as rent.

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 (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 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).

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 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 or a capital asset.

Sustainability

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