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What is Land Economics?

Mary McMahon
Updated May 16, 2024
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Land economics is a branch of the economics field which focuses on the use of land and the role of land in economics. It often intersects with environmental economics, since land use policies have an impact on the health of the environment, and many land economics trade journals focus on the environmental ramifications of land use around the world. Specialists in this branch of economics work in a number of places, from university campuses to public utilities.

Land itself is a resource like labor or capital, especially when the land harbors deposits of natural resources like minerals, oil, or timber. It is also a fixed resource: the amount of available land on Earth is finite, although land speculation may create situations in which the supply of land cannot meet the demand. The way in which land is used can have a profound impact on a local or national economy, whether that use is urban or rural. Public and private uses of land and their sometimes conflicting needs are also of interest in land economics.

One of the fields of focus in land economics is the allocation of land. As a fixed resource, land's value is dictated by its availability, and the allocation of land resources can play a critical role in how land is treated. In packed cities, for example, land can be scarce and difficult to obtain, and it has a correspondingly high price. In rural regions, however, land may be very inexpensive due to decreased demand. Or, demand for land which can be used as housing may inflate the prices of farmland, making it difficult for farmers to buy or retain land for farming use.

Researchers in this field may look at issues like government acquisition of land to satisfy right of way requirements for roadways and utilities, and land use policies which force land to remain unoccupied and unused for large stretches of time. They also look at how land can be made more profitable, and how land values shift over time in response to a variety of factors including market pressures and the discovery of natural resources.

The study of land economics is often closely wrapped up in politics, especially politics on a local scale. Powerful planning commissions and lobbies may be able to push the nature of land use in their communities, shaping land use policies and the economics of locally available land in ways which sometimes surprise economists. Regional and national governments also play a role in land economics, by establishing policies which are designed to balance the needs of individuals against the needs of the government and the population as a whole.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments

By anon328486 — On Apr 04, 2013

In countries like Zimbabwe, land economics and banking are difficult. This is because of politics, whereby the so-called land distribution in Zimbabwe was done on political grounds. In fact, only Zanu Pf supporters got the farms without skill and capital. Farm production was negatively affected, thereby causing famine in the country which is arable.

The land is not producing to its potential and its value is getting lower each day. Poor methods of farming by the new farmers is greatly leading to land degradation.

By anon54757 — On Dec 02, 2009

Can there be land economics and land banking in a country like Zimbabwe?

By anon46140 — On Sep 23, 2009

land economics is more useful than i thought it was, because it helps the government to decide what land should be developed and what land should not. more government policies on land used should be enforced. The aftermath is an organized environment for everyone.

Mary McMahon

Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

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