1. The Land Market

2. Is the market for land different from that of other goods? Is there a fixed supply of land?

3. Land is fixed in total supply but the amount available for any one use is not fixed.

4. The land allocation decision Private markets Rationing function of price

5. Externalities & market failure Efficiency? Desirability?

6. Market failure provides a rationale for restrictions on rights Regulatory structures Regulations affect the use of land and the market price of the rights. Taxes & subsidies can be used to correct for market failure

7. Do the regulations lead to sustainable development?

8. How is the price of land determined? When an individual sells a property they are exchanging the enjoyment of the property for personal use or exchanging entitlement to a stream of income from the property.

9. Land is a capital asset The market price for a capital asset is based on the value of future net benefits that the asset is expected to generate. The process of calculating the present value of future income is called discounting.