Rugoz wrote:I know you like land a lot (I mean A LOT),
"Like" it? No, I'm just willing to know facts about it.
but it's irrelevant to our discussion in this thread.
I agree. What you were talking about was perhaps the rents of mineral resources. So that's what you should have said.
As for the 20%, you mentioned the paper from Rognlie in another thread, have you actually read it?
Only part of it. It's pretty long.
Total US land rents amount to 4% of US GDP (page 42 here).
No, that's just an estimate for economic modelling purposes, not an empirical measurement, and is clearly absurdly low. He says 3% of GDP goes for non-residential (i.e., commercial, industrial and agricultural) land, but that is low of the mark. And his 1% of GDP estimate for residential land rent is just nonsense. The total value of residential land is nearly double the value of non-residential land, so even if the 3% figure for non-residential land rent were correct (it's not), residential land rent would have to be at least 5% of GDP. Think about it: he estimates labor's share of GDP (wages) at 60%; but land's share of housing costs is typically over 50% (it is often 80% or more), and people generally pay an average of about 1/3 of their wages for housing (many pay over half). How can residential land account for only 1% of GDP? It's ridiculous. Do the math: .60 x .50 x .33 = .10, not .01.
Provide a source for the 20% of global GDP.
As shown above, it's around 15% in the USA (see also Gaffney, 2009, 'The Hidden Taxable Capacity of Land: Enough and to Spare'). Most other countries that account for the majority of global GDP -- China, Japan, Germany, France, the UK, India, Italy, South Korea, etc. -- are much
more crowded than the USA, and their land rents are consequently an even higher fraction of GDP.