Sanjoy Chakravorty
- Published in print:
- 2013
- Published Online:
- May 2013
- ISBN:
- 9780198089544
- eISBN:
- 9780199082438
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198089544.003.0009
- Subject:
- Economics and Finance, Public and Welfare
This chapter begins with a model of land rents and follows with separate discussions of the recent dynamics of urban and rural land markets. The data show that land prices in urban and rural settings ...
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This chapter begins with a model of land rents and follows with separate discussions of the recent dynamics of urban and rural land markets. The data show that land prices in urban and rural settings have increased very rapidly in the last decade—fivefold in urban areas and possibly more in some rural settings. Urban prices are significantly higher than is commensurate with income and the peaks of these prices are extraordinarily high by international standards. Similarly, rural prices cannot be explained by agricultural productivity and, in several regions, are very high by international standards. A combination of land scarcity and widespread poverty kept prices low for decades, and the contemporary conditions are explained by a combination of increasing land scarcity with increasing money supply (from expanded housing credit, and rising incomes from white, black, and foreign sources) and increasing income and wealth inequality. This is not a bubble; it is a new price regime.Less
This chapter begins with a model of land rents and follows with separate discussions of the recent dynamics of urban and rural land markets. The data show that land prices in urban and rural settings have increased very rapidly in the last decade—fivefold in urban areas and possibly more in some rural settings. Urban prices are significantly higher than is commensurate with income and the peaks of these prices are extraordinarily high by international standards. Similarly, rural prices cannot be explained by agricultural productivity and, in several regions, are very high by international standards. A combination of land scarcity and widespread poverty kept prices low for decades, and the contemporary conditions are explained by a combination of increasing land scarcity with increasing money supply (from expanded housing credit, and rising incomes from white, black, and foreign sources) and increasing income and wealth inequality. This is not a bubble; it is a new price regime.
Arvind Panagariya
- Published in print:
- 2020
- Published Online:
- September 2020
- ISBN:
- 9780197531556
- eISBN:
- 9780197531587
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780197531556.003.0007
- Subject:
- Economics and Finance, Development, Growth, and Environmental, South and East Asia
Economic transformation involves a movement of workers out of agriculture and into industry and services. The latter are predominantly located in and around urban areas. Therefore, urbanization is ...
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Economic transformation involves a movement of workers out of agriculture and into industry and services. The latter are predominantly located in and around urban areas. Therefore, urbanization is integral to transformation and modernization. In India, the process of urbanization has been extremely slow. The high cost of living and a scarcity of low-cost rental housing have in turn impeded the faster movement of agricultural workers into industry and services. A key problem behind this situation is the high cost of urban land, a result of a very low floor space index, complex rules on the conversion of agricultural land on the periphery of cities, the difficulty of converting space from one use to another, and the large volume of unused land owned by sick firms or various government ministries; poor transportation networks add to the problem. The chapter spells out reforms to relax these constraints.Less
Economic transformation involves a movement of workers out of agriculture and into industry and services. The latter are predominantly located in and around urban areas. Therefore, urbanization is integral to transformation and modernization. In India, the process of urbanization has been extremely slow. The high cost of living and a scarcity of low-cost rental housing have in turn impeded the faster movement of agricultural workers into industry and services. A key problem behind this situation is the high cost of urban land, a result of a very low floor space index, complex rules on the conversion of agricultural land on the periphery of cities, the difficulty of converting space from one use to another, and the large volume of unused land owned by sick firms or various government ministries; poor transportation networks add to the problem. The chapter spells out reforms to relax these constraints.
