economic rent

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economic rent

  1. payments (in money or in kind) made to the owner or controller of property for its use. Historically, in preindustrial societies, rent paid and received for LAND has been of major importance, e.g. under the FEUDAL MODE OF PRODUCTION. In MARXIAN ECONOMICS, with reference to situations where rent for land is levied in a context in which market relations exist, two main forms of rent are recognized:
    1. absolute rent, the basic level of rent; and
    2. differential rent, the extra rent obtained from land of higher than average productivity (not including any return on additional CAPITAL invested in improving the land).

    Debate has existed (e.g. Hindess and Hirst, 1975) as to whether taxes on peasant production levied by the state constitute a fundamentally different MODE OF PRODUCTION (see also ASIATIC MODE OF PRODUCTION) from the forms of rent' that emerged in Western Europe, or whether the ‘tax-rent’ couple constitute a single mode of production. For some Marxists, the attraction of the latter view is that the idea of a single developmental sequence of modes of production can be preserved.

  2. (ECONOMICS) rent or quasi-rent, any payment, or part payment, made for a FACTOR OF PRODUCTION, including human labour, which derives from an absolute shortage of supply (e.g. the fixed supply of land, inherent limitations in the supply of ‘talent’, outstanding musical or sporting abilities). Compare FUNCTIONALIST THEORY OF SOCIAL STRATIFICATION.

economic rent

That rent on a property which is sufficient to pay all costs of operation, maintenance, and payment of mortgages (but not utilities and services).
References in periodicals archive ?
(11.) Mathematically, scarcity rent is the shadow price of the physical stock constraint given that a market equilibrium is defined as maximizing the sum of producer and consumer surplus.
Firms earn scarcity rents (P' - [P.sup.o]) for each of the Z' units, for profits of area 2 + 3.
The only differences involve distributional effects, such as who gets the scarcity rents. This rectangle (area 2 + 3) might go to firms as profits, to government as tax revenue, or to consumers as surplus.
Revenue from atmospheric scarcity rent, if it's efficiently captured and recycled, could exceed $1 trillion over the next 15 years--more than the Clinton and Kerrey plans combined.
But noting from (17a) that along the optimal path of carbon accumulation one has q/q = - q/x = (-[alpha][a.sub.1]), it follows that along that path the optimal scarcity rent will also remain constant if and only if [sigma](x0 is constant and equal unity.
The following sections consider interactions with other taxes and the issue of scarcity rents.
Scarcity rents then tend to flow upstream to the owners of the scarce inputs.
This will lead to an excessive amount of effort on the part of the fishery, dissipating scarcity rents, and resulting in depletion of the stock.
Because the focus on revenue can be misleading, we propose an alternative interpretation that associates the exacerbation of pre-existing tax distortions with policies that generate privately retained scarcity rents. The rents interpretation can be seen most easily in a cap-and-trade program such as the sulfur dioxide trading program just described.