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 economic 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.