1 Urban Economics Lecture 3 How are activities arranged within cities? Land rentversus land value(defn.): land rent is the price of using land for a year; land value is the value at which the land sells. Land rent is a flow; land value is a stock. Can translate between the two using present value,the value of land is the discounted present value of future rents. PV = value of land = ...3)1(2)1()1(++++++rRrRrR... = rR/where r is the discount rate.
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