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Home Rent Economic Progress and Rent

 

Economic Progress and Rent:

 

Economic progress has a close bearing on rent. Economic progress can take the form of:

 

(i) Improvement in the means of communication and transport.

 

(ii) Improvement in the art of cultivation.

 

(iii) Increase in the population.

 

(iv) Growth of civilization.

 

Let us now examine how rent is affected by these improvements.

 

(i) Improvement In the Means of Transport and Rent: If there is an improvement in the means of communication and transport, the agricultural products will be marketed at a cheaper cost. The rent of the land which is situated near the market will fall and the rent of the distant land will rise as they are now almost near the market as regards the marketing of products.

 

(ii) Agricultural Improvements and Rent: An improvement in the technique of cultivation exercises powerful influence on rent from agricultural land. If better methods of cultivation are discovered and applied, the yield per acre will increase. It will result in the total increase of agricultural products. If the demand for the agricultural commodities does not increase to the same extent as the. increase in production has taken place, the price of the products will fall. Inferior grades of land which were being cultivated at the old price, will now be thrown out of cultivation. The margin of cultivation will ascend and so the rent will decrease.

 

(iii) Growth of Population and Rent: If there is an increase in the population, the demand for agricultural products goes up. People either bring under cultivation inferior kind of land or resort to intensive cultivation. As inferior grades of land are brought under cultivation, the rent on the superior grades of land begins to increase. So, we conclude that with the growth of population, the margin of cultivation descends and the rent goes up.

 

(iv) Growth of Cultivation and Rent. With the increase in the standard of living of the people, the demand for various kinds of agricultural products increases. The agriculturists meet the demand by bringing the inferior grades of land under cultivation. As inferior grades of land are brought under plough, the rent of the superior grades of land goes up.

Relevant Articles:

Definition and Meaning of Rent
Ricardian Theory of Rent/Ricardian Model of Rent
Modern Theory of Rent
Rent and Price Theory
Concept of Quasi Rent
Economic Progress and Rent
 

Principles and Theories of Micro Economics
Definition and Explanation of Economics
Theory of Consumer Behavior
Indifference Curve Analysis of Consumer's Equilibrium
Theory of Demand
Theory of Supply
Elasticity of Demand
Elasticity of Supply
Equilibrium of Demand and Supply
Economic Resources
Scale of Production
Laws of Returns
Production Function
Cost Analysis
Various Revenue Concepts
Price and output Determination Under Perfect Competition
Price and Output Determination Under Monopoly
Price and Output Determination Under Monopolistic/Imperfect Competition
Theory of Factor Pricing OR Theory of Distribution
Rent
Wages
Interest
Profits
Principles and Theories of Macro Economics
National Income and Its Measurement
Principles of Public Finance
Public Revenue and Taxation
National Debt and Income Determination
Fiscal Policy
Determinants of the Level of National Income and Employment
Determination of National Income
Theories of Employment
Theory of International Trade
Balance of Payments
Commercial Policy
Development and Planning Economics
Introduction to Development Economics
Features of Developing Countries
Economic Development and Economic Growth
Theories of Under Development
Theories of Economic Growth
Agriculture and Economic Development
Monetary Economics and Public Finance

History of Money
 

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