Meaning of rent:-
In general, rent is that which is paid to owner of property by the persons who do the usage of his camel.
Types of Rent:-
- Total Rent: – Economic rent + interest on capital invested on land, remuneration to land owners for his efforts for land development +projects for risks undertaken by the owner.
- Economic Rent: – It is that part of total rent which is paid to the owner for the usage of land.
Total income reclined from agriculture “ economic Rent = Cost of production - Contract Rent: – The rent which is ascertained by mutual agreement or contract for use of land, between the farmer & the land owner is contract rent.
Theory of Rent
There are two types of theories of land.
- Classical or ricardian theory of rent.
- Modern theory of rent.
- Ricardian theory of rent: – The payment paid to the owner for the usage of original & indestructible wears of solid is rent.
- Modern theory of Rent:- The difference between the transfer income received by the factor of production & the actual income is known as rent.
Author – Lalita Soni