Land

Carl Christian von Weizsäcker () and Hagen Krämer
Additional contact information
Carl Christian von Weizsäcker: Max Planck Institute for Research on Collective Goods

Chapter Chapter 5 in Saving and Investment in the Twenty-First Century, 2021, pp 105-136 from Springer

Abstract: Abstract Private wealthWealth, private is comprised in part of capitalized future land rentsLand rents. The Golden Rule of AccumulationGolden rule of accumulation is preserved even if we introduce land into our meta-modelMeta-model. Urban landLand, urban is far more valuable than agricultural landLand. The riskRisk tied to land leads to a reduction in its value in the form of a “risk premiumRisk premium” α > 0. Land rentsLand rents can be taxed without any possibility of the tax being passed on to tenants and without loss of efficiency. If the tax is offset by a reduction in income tax, their taxation can even give rise to efficiency gains and positive distributive effects. The possibility of government intervention in the residential rental market represents a further risk for landowners. The sensitivity of the value of land to changes in the interest rate and hence the risk premiumRisk premium α rise with falling interest rates. In light of these many different risksRisk, landLand as investment can only to a limited extent be a substitute for government bonds and hence for increasing private wealthWealth, private by way of public debt. We calculate the value of landLand as asset category in the OECD plus ChinaChina region. To this end, we primarily rely on data from statistical offices that provide figures for land in their national balance sheets. Our calculations show that the value of land in the countries of the OECD plus ChinaChina region is about twice annual consumption in the region.

Date: 2021
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-75031-2_5

Ordering information: This item can be ordered from
http://www.springer.com/9783030750312

DOI: 10.1007/978-3-030-75031-2_5

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().