Economic rents


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Economic rents

Profits in excess of the competitive level.

Economic Rents

1. Profits in excess of what the market would otherwise command. A company can receive economic rents if it is a monopoly, or if it is part of a cartel. See also: Rent-seeking behavior.

2. The amount of money the owner of a property can reasonably demand in order to rent that property.
References in periodicals archive ?
Similarly, the dollar amount of the economic rents in period t is given by er times [K.sub.t].
Under this framework, the government would be justified in collecting a high royalty if the stock of the mineral were limited even if there were no economic rents. (60) On the flip side, if the stock of the mineral were large relative to anticipated demand, the royalty would be lower.
Peteraf (1993) argues that resources controlled by the firm generate a sustained competitive advantage when four cornerstones are present: (i) resources are heterogeneous within the industry, so that the firm can generate superior incomes (Ricardian or monopoly rents); (ii) the existence of ex post limits on competition, so that the rent is not dissipated by competition in the product market; (iii) resource mobility is imperfect, allowing the preservation of the economic rent within the firm; (iv) existence of ex ante limits on competition, indicating that the market of productive factors is unable to appropriate all income generated by the resources.
Under a self-interested government, regulatory policy is used to create economic rents. As a result, corruption leads to less economic freedom.
Also, their economic rents were relatively high due to unreformed feudal relations.
Here, the court determined that no legal precedent establishing a minimum number of units had been provided, consequently the court applied the presumption and held the actual rent was the economic rent.
Under specific taxation, a revenue maximizing government will tend to employ a lump-sum tax on the producer that is equal to his entire monopoly profits--effectively transferring all rents from the producer, whereas under an ad valorem tax, the monopolist will still retain some economic rents due to the imperfect tax mechanism.
Only age bias adjustments are applied to the previous rents to reduce the previous pure and economic rents and increase the price change to the current period.
More and more groups have become beneficiaries of "economic rents" through the continuation of high and imposition of new barriers on trade and domestic competition, on award of contracts on the basis of contacts and connections or underhand deals, gifts of state lands and plots and undeserved subsidies.
However, some economic rents are high not simply because of manipulation and the bad behaviour of economic agents but arise from low competition (free entrants) into sectors of relative low cost and high returns.
This isn't what the media are talking about when they rage against the economic rents being received by greedy bankers on Wall Street.
For example, the six-month change in rent for all renter-occupied units in a segment is the ratio of (1) the sum of the current economic rents for each sampled unit within the segment, weighted by the total renter weight for that segment, and (2) the sum of the economic rents charged six months ago for each sampled unit within the segment, weighted by the total renter weight for that segment.

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