220 WHEAT PRODUCTION IN NEW ZEALAND 
3. Rent. 
Remembering, then, that expenses of production are 
to be taken as the money costs of the various efforts and 
sacrifices which are required in making the commodity, 
an analysis of the various costs to be taken into account 
in estimating cost of production can be considered. 
Not only must the costs of ‘‘putting the crop in’’ and 
“‘harvesting’’ it be accounted for, but all subsidiary 
costs such as transportation, distribution, and marketing 
must receive consideration. Perhaps the most frequently 
misrepresented item is rent, and this quite apart from 
the controversy over the length of time for which rent 
must be calculated. A lengthy analysis of the conception 
‘“economic rent’’ is not necessary here, but it may be 
stated briefly in order that no misunderstanding will 
arise in regard to the position taken up. 
Economic rent in regard to land means the surplus 
produce of any tract over and above that of the least 
productive soil, which pays no economic rent, and pro- 
duces for the same market. It is a payment for a 
differential advantage, and in regard to land this 
differential advantage is superior fertility or greater 
proximity to the market, or a combination of these.* 
Now, it is important to notice that rent is a phenomenon 
of price but not a cause of high price. This can be 
established by considering the origin of economic rent 
in the superiority of certain soils over others in fertility 
or proximity to the market. A higher price will always 
bring into production inferior soils, and thus the rent on 
the other groups will rise. It is quite clear that this is 
a result of the high price and not a cause of it. The 
statement that the high price of land renders wheat 
growing unprofitable is misleading because of this. 
What is the cause of this high price? Surely one of 
the most important factors in recent years is the extra- 
*For an analysis of economic rent the reader is referred to 
a text-book on ‘‘Economics’’ by Marshall, Taussig, or Chapman. 
