Land is one of the most important aspects of human life as it is a very important factor of

production. This essay will therefore discuss the characteristics of land as a factor of
production.
Factors of production are natural resources that are used in the production of goods and
services. . These can also be defined as economic resources that are used to produce goods
and services in order to satisfy wants. These economic resources are essential in the
production of goods and services.
"Land" in economics means all natural resources and agents, with their sites (locations and
extensions in space).  Land is not just the matter occupying space: it is space. It includes
many things not colloquially called land, such as it, therefore, means all the free gifts of
nature. These natural gifts include: rivers, forests, mountains and oceans; heat of sun, light,
climate, weather, rainfall, etc. which are above the surface of land; minerals under the surface
of the earth such as iron, coal, copper, water, etc. According to Marshall, “By land is meant…
materials and forces which nature gives freely for man’s aid in land, water, air, light and
heat.” Therefore, land is a stock of free gifts of nature.
The following are some of the characteristics of land as a factor production
Alchian .A. and Allen .W. (1983:125) attributes that land is a free gift on nature. Man has to
make efforts in order to acquire other factors of production. But to acquire land no human
efforts are needed. Land is not the outcome of human labor. Rather, it existed even long
before the evolution of man. Land is not produced or man-made resource and therefore man
has to accept it as it is because it is a free gift given to man by nature.
In line with Hanson J.L. (1981:250), land is not produced, it was created.  It is the world, the
planet from which man evolved, with the sun that energizes it and the orbit that tempers it. 
Land is a free gift, variously expressed in different philosophies as Spaceship Earth, the Big
Blue Marble, God's Gift, Creation, Gaia, The Promised Land, or nature.  Mankind did not
create The Earth with its space and resources, nor can we add to them.  We can only acquire
them, often by fighting, or rent-seeking, or in other counterproductive ways.  Man at best
improves and develops capacities inherent in the free gift.
Land is of fixed quantity. Fellmeth .R. (1973:6) asserts that the total quantity of land does not
undergo any change. It is limited and cannot be increased or decreased with human efforts.
No alteration can be made in the surface area of land.
Land is permanent. Stephen F.H. (1984:133) affirms that all man-made things are perishable
and these may even go out of existence. But land is indestructible. Thus it cannot go out of
existence. It is not destructible. Land is therefore a permanent factor of production.
According to Hanson J.L (1981:250), land is a primary factor of production. Though all
factors are required for production, land puts foundation for all production process. Starting
point of production process is an acquisition of land. In any kind of production process, we
have to start with land. For example, in industries, it helps to provide raw materials, and in
agriculture, crops are produced on land. So, it is a primary factor.
Land is a passive factor of production. Todaro M.P. (1981:250) supports that this is because it
cannot produce anything by itself. For example, wheat cannot grow on a piece of land
automatically. To grow wheat, man has to cultivate land. Labor is an active factor but land is
a passive factor of production.
Land is immovable. Todaro M.P. (1982:2400 affirms that it cannot be transported from one
place to another. For instance, no portion of India’s surface can be transported to some other
country. It therefore lacks geographical mobility.
According to Stephen F.H. (1984:133), land has some original indestructible powers. This is
because land is durable and not perishable. It has a long life. No one can destroy the land.
There are some original and indestructible powers of land, which a man cannot destroy. Its
fertility may be varied but it cannot be destroyed completely.
Land is of infinite variety. Land is not man made and therefore it is of so many endless
varieties. For example, soil may be of different types, climate elements like temperature,
rains received in different parts is always varying. Todaro M.P. (1982:241).
In line with Hanson .J.L. (1981:250), land differs in fertility. Fertility of land differs on
different pieces of land. One piece of land may produce more and the other less.
Alchian .A. and Allen.W. (1983:6) attributes that from society’s point of view, supply of land
is perfectly inelastic, that is, it is in fixed quantity. The demand for a particular commodity
makes way for the supply of that commodity, but the supply of land cannot be increased or
decreased according to its demand. This is because no one can change the size of the earth.
According to Fellmeth R. (1973:6), land has got many uses. We can make use of land in
many ways. On land, cultivation can be done, factories can be set up, roads can be
constructed, buildings can be raised and shipping is possible in the sea and big rivers.
Land as site is permanent and recyclable. Holland .D. (1970:157) affirms that land as "site"
(location plus extension) does not normally wear out, depreciate, spoil, obsolesce, nor get
used up by human activities incident to occupancy and production. After being formed, it
must be conserved from entropy by continual maintenance, repair, remodeling, safeguarding
against theft and fire, and so on.  Like our own bodies, it returns to dust; land is the dust to
which it returns.
Fellmeth .R. (1973:9) supports that land normally does not depreciate as a function of time. 
Most attributes of land also withstand use and abuse.  Most land is, rather, expected to
appreciate in real value in the long run.  Values go in cycles, but the secular history is
upwards as population, capital, and demands all grow while land remains fixed.
In line with Todaro M.P. (1982:241), land is reusable. All the land we have is second-hand,
most of it previously-owned.  Our descendants, in turn, will have nothing but our hand-me-
downs.  As there is never any new supply, the old is recycled periodically, and will be in
perpetuity, without changing form or location. Melded briefly with fixed buildings, land
survives them to go one more round of use. Land retains a practicable, measurable,
meaningful opportunity cost.
Being both unreproducible and permanent, land remains fixed. According to Hanson J.L.
(1981:250), both the overall quantity and the special qualities of specific lands remain fixed.
While land remains the same. In the last fifteen years over half the buildings have been
replaced or heavily remodeled.  Streets have been repaved and widened; utilities enhanced. 
Inventories have turned over hundreds of times; cars in the parking lots have come and gone
thousands of times.  Through it all, the land is the same.
Alchian A. and Allen .W. (1983:127) attributes that the overall planet is fixed so as is land.
Even the planet may change, but "fixed" here means "given" or "exogenous" or "outside
individual control," not necessarily static.  Cosmic and tectonic and climatic changes are
given, so far as man is concerned.  Changes caused by mankind collectively are given so far
as individual landowners are concerned.
In line with Hanson .J.L. (1981:250), land does not migrate. When demand grows for land in
a specific area or neighborhood, land cannot immigrate to meet the higher demand.  It is true
that land elsewhere can be converted to the specific land use that is demanded.  Some micro
theorists argue that this makes land as "mobile" as anything else, equating land and capital.  It
dovetails with and reinforces their paradigm centered on "the firm," a unit that can add
unlimited inputs of all kinds in the long run, and among which competition drives all profits
to zero.  This rationalization overlooks the hoary adage of real estate: "value depends on three
factors, location, location, and location." What happens then is not that supply rises to meet
higher demand, but ground rent rises.
Land values are marked by continuity in space. According to Stephen F.H (1984:133), the
price of land is closely related to that of adjoining land, for they are usually near substitutes.
The continuity is both concentric and axial.  It is therefore possible to map land values as one
would map elevations, drawing contour lines of equal unit value.
Land earns rent as a reward for its use. Hanson .J.L. (1981:250) affirms that classical
economists like Ricardo connected rent with fertility of land whereas modern economists like
marshall stated that land earns rent because of its scarcity. But the overall point still remains
that land earns rent as a reward for its use.
The services of land perish with time. In line with Holland .D. (1970:161), land is "immobile
in time" in the sense that its services flow steadily with time.  They cannot be stored and
shifted forward to meet anticipated higher future demand, like stored goods.  They cannot be
bunched, like military tanks for an attack.  One cannot reach into the future and marshal them
for present needs or emergencies.  They are never "on tap," for drawing down at will; neither
may they be set aside for future use.  Rather they flow down the river and out the gates of
time to sink forever into the dead past.
Fellmeth .R. (1973:9) asserts that land divisions entails the idea of packing. One individual
parcel does not expand or contract without impacting the whole system.  Parcels have
common boundaries and must be packed together so that they all fit.  Many costs like fencing
and roads and utilities are shared along the common boundaries.  These costs vary with the
length of the boundaries.
Land is immobile among taxing jurisdictions. In line with Stephen F.H. (1984:133), tax
jurisdictions are specific areas of land, they are defined that way.  Land cannot escape from
taxation. Further, it follows that all purely local taxes are shifted to land, whatever the
nominal base of the tax. If the application of labor and capital to land yields no surplus or
rent, there is no tax base: any attempt to tax the labor and capital must simply drive them
away, unless the use of the taxes itself creates rent.
Alchian .A. and Allen .W. (1983:127) attributes that land is not convertible into other land.
Each unit of land is permanently unique. Land is not at all fungible: no specific unit of land is
convertible into any other.
According to Holland .D. (1970:160), land is not necessarily versatile. Land must serve all of
man's needs of the day, and perpetual streams, waves, and eddies of new fads and demands,
with no physical change. Even land that is allegedly “made” by filling in underwater sites is
taken from navigation, fish, recreation, wildlife, and other previous uses.

Fellmeth .R. (1973:7) affirms that new demands and discoveries bring out new virtues in old
land but it is man that has changed, not land.  The resources were always there waiting. Land
rarely obsolesces in the sense that specific capital goods do.  Land's opportunity cost remains
a viable option, because the only source of land for new uses today, as for ages past, is to take
it from its previous use.  We tear down old buildings mainly to salvage and recycle the land.
The concept of opportunity cost should apply mainly to land.
Land per se is economically divisible. Todaro .M.P. (1982:241) postulates that since land
does not have to be produced, it can be divided into parcels as small as you please. 
In subdividing land into small parcels there are, it is true, extra costs, but the cost per lot
falls.  Of course the cost per square foot rises, but the cost per dollar of value created
generally also falls, which is why it is done.  Apartments, condominia, strata titles and time-
sharing represent extreme subdivision without increasing cost.

In line with Hanson .J.L. (1981:250), those who require much land normally have limited
choice of locations: they must go where land may be had in large pieces.  It is either that, or
buy it already assembled by others. 

Land is indispensable to life, hence to economic activity. In line with Holland .D.
(1970:159),  land can exist perfectly well without labor or capital, and support timber and
wildlife, but labor and capital cannot exist at all without at least some land, and often a great
deal of land.  Substitution is limited.  It will not do just to have 57 varieties of labor, or of
capital.  There must be at least some land.  Remember, land includes space itself, and a time-
slot in it.  It includes air and water, the environment and the ecology and all original matter
itself.  Without land there is nothing. Coupling this with the non-reproducibility of land, and
its fixity, land is distinctive.
According to Todaro M.P. (1982:240), land has a derived demand. Demand for agricultural
goods is direct demand and for producing such products, land is indirectly demanded. So, as a
factor, land has a derived demand from the consumer’s point of view.
In line with Fellmeth R. (1973:7), land may have diminishing returns. Here, return means
quantity of crops, by using the fertility of land with the help of capital and labor continuously,
returns may get diminished because of reduction in fertility.
In conclusion, land as a factor of production shows many characteristics that make it very
unique. Land is a free gift of nature, it is a primary factor of production, it has perfectly
inelastic supply, and it also maintains its grad ability. Land is a passive factor of production,
it may also have diminishing returns, it has a derived demand, and it has no social cost. Land
also maintains other characteristics such as the fact that it has no social cost, being an
indestructible factor and being perfectly immobile. Land also has a site or location value and
it earns rent as a reward for its use. All these peculiarities are what make land the unique
factor of production that it is.
 REFFERENCES
Alchain .A. and Allen .W. (1983), Exchange and Production.
California: Wadsworth Publishing Company.
Fellmeth .R. (1973), Politics of the Land. New York: Grossman Publishers.
Hanson J.L. (1981), Introduction to Applied Economics.
Estover: Mcdolnald and Evans ltd.
Holland .D. (1970), The Assessment of Land Value.
Madison; university of Winston press.
Stephen F.H. (1984). The Economic Analysis of Producers’ Cooperatives.
London; Macmillan Press ltd.
Todaro M.P. (1982), Economics for a Developing World.
Singapore: Longman Publishers ltd.