Three Productive Dimensions

• Materials: The obvious dimension of land is the provision of naturally occurring materials, the materials that provide the "substance" of tangible products. The materials needed to build a house, for example, include lumber for the walls, asphalt shingles for the roof, plastic pipe for the plumbing, and copper wire for the electrical system. All of these materials originate with the land--vegetation growing on the land, and minerals found in the ground. No land, no raw materials, no goods.


• Space: A second, not so obvious, dimension of land is space. In other words, land provides a place to "put things." Every THING needs to be some PLACE, with emphasis on the word PLACE. Land is the resource used for this storage function. The spatial storage aspect of land is often augmented with capital (for example, a warehouse), but it begins with land. Land, for example, provides the space, the surface area, to construct a house.


• Accessibility: The third, and also somewhat obscure, dimension of land is location or accessibility. Everything is located relative to other things. Some are closer, some are farther away. Closer locations require fewer scarce resources (and thus incur less opportunity cost) for transportation. Because resources are used to transport as well as to transform, accessibility and close location reduce the opportunity cost of transportation. A house that is located closer to school, work, and shopping is usually preferred because transportation cost is less.

Natural Resources

• On: Naturally occurring resources on the surface of the land include water (rivers, lakes, and oceans), vegetation (trees, bushes, and grass), and wildlife (rabbits, deer, fish, and crawling insects).


• Under: Naturally occurring resources under the surface of the land include mineral deposits (iron ore, bauxite, and diamonds), energy reserves (petroleum, natural gas, and coal), soil nutrients (phosphorus, nitrogen, and potassium), wildlife (gophers and earthworms) and ground water.


• Above: Naturally occurring resources above the surface of the land include air (oxygen, nitrogen, and assorted trace elements), precipitation (rain, snow, sleet, and hail), solar radiation (sunshine), wildlife (birds and flying insects), atmospheric conditions (the ozone layer and greenhouse gases), and outer space (meteors, twinkling stars, and a full moon).

Land or Capital

Consider a few examples.

• Farmland: Farmland provides an excellent place to locate growing crops. However, the land itself is as much, if not more, a factory than a natural resource. Like a modern factory, inputs are "brought in" to the farmland (seeds, fertilizers, pesticides, irrigation water) and outputs are "shipped out" from the farmland (harvested crops). Like a factory, farmland provides the structure used for production. The land just happens to be a lot flatter.


• Dairy Cows, Chickens, and Sheep: Cows used for milk production, chickens used for egg production, and sheep used for wool production also operate much like factories. Inputs (feed, water) are given to the animals and outputs (milk, eggs, wool) are produced. Like other capital goods, cows, chickens, and sheep are used to produce several goods. The difference is that, unlike traditional factories, these animal factories are alive.