Differential and absolute ground rent

About: Differential and absolute ground rent is a research topic. Over the lifetime, 241 publications have been published within this topic receiving 10000 citations.

Theories of Surplus Value

Abstract: Marx's Theories of Surplus Value is the fourth volume of his monumental Das Kapital (Capital) Divided into three parts, this lengthy work reviews classic economic analyses of labour and value (Smith, Ricardo, Malthus, and others), focusing on the concept of "surplus value" - the difference between the full value of a worker's labour and the wages received for this labour This is a key concept for Marx since in his view the capitalist maintains power through controlling surplus value

Owner-Occupied Housing as a Hedge Against Rent Risk

Abstract: Many people assume that the most significant risk in the housing market is that homeowners are exposed to fluctuations in house values. However, homeownership also provides a hedge against fluctuations in future rent payments. This paper finds that, even though house price risk endogenously increases with rent risk, the latter empirically dominates for most households so housing market risk actually increases homeownership rates and house prices. Further, the net effect of rent risk on the demand for homeownership increases with a household's expected length of stay in its home, as the cumulative rent volatility rises and the discounted house price risk falls. Using CPS data, the difference in the probability of homeownership between households with long and short expected lengths of stay is 2.9 to 5.4 percentage points greater in high rent variance places than low rent variance places. The sensitivity to rent risk is greatest for households that devote a larger share of their budgets to housing, and thus face a bigger gamble. Similarly, the elderly who live in high rent variance places are more likely to own their own homes, and their probability of homeownership falls faster with age (as their horizon shortens). This aversion to rent risk might help explain why older households do not consume much of their housing wealth. Finally, we find that house prices capitalize not only expected future rents, but also the associated rent risk premia. At the MSA level, a one standard deviation increase in rent variance increases the house price-to-rent ratio by 2 to 4 percent.

Class-monopoly rent, finance capital and the urban revolution

Abstract: Harvey D. (1974) Class-monopoly rent, finance capital and the urban revolution, Reg. Studies 8, 239–255. This paper seeks to establish the significance of class-monopoly rent to the urbanization process. The concept of “class-monopoly rent” describes any situation in which the rate of return to a class of providers of an urban resource (such as housing) is set by the outcome of conflict with a class of consumers of that resource. The Baltimore case shows that such situations are structured by the policies of various financial institutions and that geographically distinct housing sub-markets—within which identifiable community groups live—are created as a result. Residential differentiation is thus necessary to the realization of class-monopoly rent, and class-monopoly rent provides the necessary incentive structure for the urbanization process to proceed. The process can become unbalanced because there are multiplier effects internal to it (speculation in the inner city can increase the demand for suburba...