Ricardian rent
E52110
Ricardian rent is an economic concept describing the extra income earned from land or other fixed resources due to their superior productivity compared to the least productive (marginal) resources in use.
Statements (45)
| Predicate | Object |
|---|---|
| instanceOf |
economic concept
ⓘ
theory of rent ⓘ |
| appliesTo |
fixed resources
ⓘ
land ⓘ natural resources ⓘ |
| arisesFrom |
heterogeneity of land quality
ⓘ
scarcity of superior land ⓘ |
| arisesWhen | demand for agricultural products requires cultivation of less fertile land ⓘ |
| associatedWith | classical theory of distribution ⓘ |
| assumes |
competitive markets for agricultural products
ⓘ
diminishing returns to cultivation on land ⓘ fixed supply of land ⓘ |
| basedOn |
differences in fertility of land
ⓘ
differences in location of land ⓘ differences in productivity of fixed resources ⓘ |
| category | theories of value and distribution ⓘ |
| comparedTo | marginal land ⓘ |
| concerns | distribution of income between landlords and other classes ⓘ |
| coreIdea | extra income arises from superior productivity of a resource relative to the marginal resource ⓘ |
| definedAs | the differential surplus earned by more productive land over the least productive land in use ⓘ |
| dependsOn | existence of marginal land that just covers its costs of cultivation ⓘ |
| distinguishedFrom |
economic rent in modern microeconomics
ⓘ
monopoly rent ⓘ |
| excludes |
monopoly rent not based on productivity differences
ⓘ
quasi-rent on capital ⓘ |
| explains | why more fertile land yields surplus over marginal land ⓘ |
| field |
classical economics
ⓘ
economics ⓘ |
| formalizedBy | David Ricardo in "On the Principles of Political Economy and Taxation" ⓘ |
| historicalContext | developed in early 19th century ⓘ |
| implies |
marginal land earns zero rent in competitive equilibrium
ⓘ
rent does not enter into price determination under Ricardo's assumptions ⓘ |
| influenced |
Henry George's land value taxation ideas
ⓘ
later theories of economic rent ⓘ |
| measuredAs | difference between total product of a superior plot and total product of marginal plot at same cost ⓘ |
| namedAfter | David Ricardo ⓘ |
| relatedConcept |
differential rent
ⓘ
economic surplus ⓘ ground rent ⓘ producer surplus ⓘ scarcity rent ⓘ |
| relatesTo |
law of diminishing returns
ⓘ
theory of differential rent ⓘ |
| usedIn |
analysis of land taxation
ⓘ
policy debates on land value tax ⓘ |
Referenced by (1)
Full triples — surface form annotated when it differs from this entity's canonical label.