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In economics, economic rent is any payment to the owner of a factor of production in excess of the costs needed to bring that factor into production. [1] In classical economics, economic rent is any payment made (including imputed value) or benefit received for non-produced inputs such as location and for assets formed by creating official privilege over natural opportunities (e.g., patents).
The economic rent obtained is an abnormal rent, often referred to as resource rent, since it generates from a situation where the resource owner has open access to the resource for free. In other words, the resource rent is the resource royalty or resource's net price (price received from selling the resource minus costs. In this case costs are ...
This concept is usually termed economic rent but when referring to rent in natural resources such as coastal space or minerals, it is commonly called resource rent. It can also be conceptualised as abnormal or supernormal profit. In practice, identifying and measuring (or collecting) resource rent is not straightforward.
Differential ground rent and absolute ground rent are concepts used by Karl Marx [1] in the third volume of Das Kapital [2] to explain how the capitalist mode of production would operate in agricultural production, [3] under the condition where most agricultural land was owned by a social class of land-owners [4] who could obtain rent income from farm production. [5]
Rent-seeking is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of what is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth.
Henry George had famously advocated for the replacement of all other taxes with a land value tax, arguing that as the location value of land was improved by public works, its economic rent was the most logical source of public revenue. [3] Subsequent studies generalized the principle and found that the theorem holds even after relaxing ...
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In Marxian economics, the equivalent to Schumpeterian rent is the extra surplus value that is extracted from the laborer during the rise of local productivity, meaning the development of the productive forces through innovation owned by the respective capitalist, while all other enterprises are left with yet undeveloped productive forces.