A method for measuring rents

Arend Stemerding

Cambridge Journal of Economics, 2023, vol. 47, issue 4, 747-762

Abstract: A method for measuring rents has practical relevance for society in terms of improving competition, regulation, and taxation. This paper proposes a new way to measure rents for business corporations and at country-level: a method related to a cash flow tax (CFT). Theory, method and a proof of concept are presented and discussed. Publicly available data is used to validate the method, revealing that it yields a better indication of rents and rent-seeking compared to markup, profit, and free cash flow (FCF).

Keywords: Economic rent; Rent-seeking; Competition; Market power; Markup (search for similar items in EconPapers)
Date: 2023
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