Jump to ContentJump to Main Navigation
The Environment and Emerging Development Issues: Volume 2$
Users without a subscription are not able to see the full content.

Partha Dasgupta and Karl-Göran Mäler

Print publication date: 2000

Print ISBN-13: 9780199240708

Published to Oxford Scholarship Online: September 2007

DOI: 10.1093/acprof:oso/9780199240708.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (www.oxfordscholarship.com). (c) Copyright Oxford University Press, 2020. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 06 April 2020

Public Policy toward Social Overhead Capital: The Capitalization Externality

Public Policy toward Social Overhead Capital: The Capitalization Externality

Chapter:
(p.574) 22 Public Policy toward Social Overhead Capital: The Capitalization Externality
Source:
The Environment and Emerging Development Issues: Volume 2
Author(s):

David A. Starrett

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199240708.003.0013

When land is developed, one of the benefits is captured in the value of land. The chapter argues that while capitalization is a real benefit in some circumstances, it cannot be attributed to private development: rather it is a reflection of an improvement in social overhead capital. The chapter begins with a model of the economy that can be used to examine policy issues related to land and land values. The traditional view in welfare economics is that changes in land values should have no net effect on social welfare (as gains to gainers are offset by losses to losers). This view is challenged on the grounds that this applies only when benefits and costs reflect any externalities, i.e., impacts associated with non-market variables such as environmental quality. In the case of land development in crowded areas (such as large cities), it is argued that projects that lead to increased land values or rents impose an important external cost. While private benefits may be positive, social benefits may be negative. To the extent that private development increases transport costs and congestion, it should be taxed just as any externality.

Keywords:   land development, externality, social overhead capital, social welfare

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .