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- Title
Soviet Land Value and Enterprise Location.
- Authors
Horwitz, Bertrand; Whitehouse, F. Douglas
- Abstract
The advent of the Soviet economic reforms of 1966 which are leading to a greater degree of financial decentralization of industry, has created an awareness by Soviet economists that there are shortcomings in the economic valuation of land and the determination of rent. This is particularly true for land whose value results entirely from site location for industrial development. The introduction of profit responsibility in Soviet enterprises with bonuses for managers based on profit has raised questions about economic rent as a cost factor affecting the calculation of enterprise profit. The imposition of payments to capture economic rent is a clear recognition of the need to distinguish between the success of the venture and the success of the managers, an important distinction when bonuses depend upon profit changes and the rate of return on gross assets. The value of a bonus system lies in its action as a stimulant for management to achieve established goals. Those enterprises having above normal profits and accounting rates of return by reason of favorable location or because of "technical-economic conditions not resulting from enterprise activities" are now required to pay rent.
- Subjects
SOVIET Union; INDUSTRIAL location; VALUATION of real property; RATE of return; RENT; REGIONAL planning; SOVIET Union economic policy, 1966-1970; RENT (Economic theory); ECONOMICS; VALUATION of farms
- Publication
Land Economics, 1973, Vol 49, Issue 2, p233
- ISSN
0023-7639
- Publication type
Report
- DOI
10.2307/3145289