land rent theory

Land rent theory explains how the value of land is determined by its location and usage. It suggests that land closer to cities or resources is more valuable because it offers better access, leading to higher rents. This value arises from the demand for land for housing, businesses, and agriculture. Landowners can charge rent based on this location advantage, while the economic activities nearby also influence land prices. Essentially, it highlights the relationship between land location, economic activity, and the income derived from renting that land.