New Estimates of Value of Land of the United States

Summary

"New Estimates of Value of Land of the United States" is a 2015 working paper (BEA Working Paper WP2015-3, dated April 2015; also catalogued as BEA Working Paper No. 0120) by William Larson, an economist at the U.S. Bureau of Economic Analysis (BEA) — the federal statistical agency responsible for the National Income and Product Accounts (GDP) and the U.S. national balance sheet. The paper was published as an official BEA working paper, not an academic journal article or advocacy piece, which gives it particular weight as a source: it is the U.S. government's own statistical agency producing a systematic land-value estimate using a stated, reproducible methodology, rather than an outside estimate of what land "should" be worth. Larson estimates that the roughly 1.89 billion acres of land in the 48 contiguous states and the District of Columbia were collectively worth approximately $23 trillion in 2009 (current prices), with the federal government holding 24% of the land area, valued at about $1.8 trillion. Because it comes from inside the U.S. statistical system rather than from a Georgist advocate, this figure functions as a mainstream, methodologically transparent anchor for arguments about the scale of land value in the land rent could fund government outcome.

The Core Argument / Findings

Larson's central methodological contribution is to estimate U.S. land value directly, using hedonic price methods, rather than by the indirect "residual" approach traditionally used in national accounts (subtracting an estimate of structure replacement cost from total real-property market value to leave land value as a residual). He develops hedonic estimates of land prices at a range of geographic scales — parcels, census tracts, and counties — covering multiple land uses (developed/residential, agricultural, and federal/other government-owned land), and interpolates across a mosaic of these units to produce a comprehensive national estimate.

Reported findings [VERIFY: paper's headline figure is corroborated by multiple independent secondary sources — BEA's own paper landing page, IDEAS/RePEc, and contemporaneous press coverage — but this session's web access could not directly render the full PDF text, so page-level figures beyond the headline numbers below should be treated as provisional pending direct-text confirmation]:

• Total land value: approximately $23 trillion for the contiguous U.S. plus D.C., valued at 2009 prices, covering about 1.89 billion acres.
• Federal government land holdings: approximately 24% of total land area, valued at about $1.8 trillion.
• The estimate is disaggregated by land-use category (developed, agricultural, and government/other), reflecting the very different per-acre values of urban/developed land versus rural agricultural or undeveloped land — a distinction central to Georgist arguments that land rent is concentrated in developed, high-demand locations rather than being spread evenly across acreage.

Contemporaneous coverage (Bloomberg, Forbes, 24/7 Wall St.) treated the $23 trillion figure — roughly 1.3–1.4 times 2009 U.S. GDP — as a notable, citable government estimate of the scale of national land wealth, and it has since been used by commentators on both sides of the land-tax debate as a reference point for "how big is U.S. land value."

Relation to the Georgist Case

This paper supports the land-value-scale premise behind Georgist revenue arguments, but its relationship to the broader Georgist case must be stated precisely. Larson's paper is a measurement exercise — it estimates the stock value of land — not a policy paper, and it makes no claim about land value taxation, ATCOR, optimal tax design, or how much revenue a land value tax could sustainably raise. Any inference from "$23 trillion in land value" to "a land value tax could raise $X per year" requires an additional, separate step (choosing a capitalization or rental-yield assumption, and deciding which of the estimated land value would remain a legitimate LVT base after any behavioural response) that Larson's paper itself does not undertake.

Its value to the Georgist case is therefore as a credible, independent anchor figure: a federal statistical agency, using transparent hedonic methods rather than advocacy-driven assumptions, corroborates that U.S. land value is on the order of tens of trillions of dollars — a scale consistent with claims (e.g., Gaffney's "Hidden Taxable Capacity of Land") that land rent is large enough to be fiscally significant. It does not, by itself, establish that land rent is large enough to fund any particular share of government spending.

Nuances and Limits

• Stock value, not annual rent. The $23 trillion figure is a capital/asset value, not an annual rental flow. Converting it to a plausible annual land-rent figure requires an assumed capitalization rate; contemporaneous commentary (e.g., Tim Worstall's Forbes critique, cited below) applying illustrative rental-yield assumptions (e.g., ~5%) to Larson's estimate arrived at roughly $1 trillion or so in annual land rent — a figure critics have used to argue that land rent alone would cover only a fraction of current federal spending, not replace it entirely. That argument depends heavily on the assumed yield and is a downstream extrapolation, not a conclusion Larson draws himself; it also excludes state/local spending, resource rents beyond land per se, and any ATCOR-style base expansion argued for by Georgist writers.
• 2009 valuation date. The estimate is anchored to 2009 property values, near the trough of the U.S. housing bust; land values have moved substantially (in both directions across markets) since then, so the $23 trillion figure should not be read as a current-year estimate without updating.
• Geographic scope. The estimate covers the contiguous 48 states and D.C.; it excludes Alaska, Hawaii, and U.S. territories.
• Hedonic method has its own assumptions and error. Like any hedonic pricing exercise, Larson's approach depends on the quality of the underlying price and characteristics data and on the model used to separate land value from structure value; the paper represents an improvement in transparency and method over the older residual approach but is not free of estimation uncertainty. [CITATION NEEDED: the paper's own stated confidence intervals / sensitivity analysis, and its explicit comparison to prior residual-method estimates (e.g., Federal Reserve Flow of Funds land-value figures) — not confirmed first-hand in this session because the working paper's full PDF text could not be directly fetched; the figures above rely on the BEA landing page summary and multiple agreeing secondary sources rather than the primary text itself.]
• Not a tax-policy document. As noted above, the paper does not address land value taxation, incidence, or revenue capacity; readers should not treat it as making or supporting any policy recommendation.

Bears On

• Outcome: Land rent could fund a large share of government — provides an independent, official-statistics estimate of the scale of the U.S. land-value base that revenue-sufficiency arguments depend on, though the paper itself does not estimate annual rent or revenue capacity.
• Objection: LVT can't raise enough revenue — the $23 trillion figure has been used on both sides of this objection: as evidence land value is large, and (via illustrative capitalization-rate extrapolations by critics) as evidence that annual land rent alone may fall short of total government spending.
• Concept: Mass Appraisal Methods (CAMA, Hedonic Regression, Land/Building Separation) — Larson's hedonic, direct-estimation approach is a real-world national-scale application of these methods, in contrast to the older residual approach.
• Concept: Economic Rent — a land-value stock estimate is the necessary starting point for any argument about the scale of land rent as a flow.

See Also

• Albouy, Ehrlich & Shin (2018), Metropolitan Land Values
• Land Value Tax
• Economic Rent
• Mass Appraisal Methods (CAMA, Hedonic Regression, Land/Building Separation)
• Gaffney — The Hidden Taxable Capacity of Land
• Objection: LVT can't raise enough revenue

Sources

1. William Larson (2015), "New Estimates of Value of Land of the United States," BEA Working Paper WP2015-3 (April 2015; also catalogued as BEA Working Paper No. 0120). BEA — used for the paper's title, author, venue, date, and headline findings ($23 trillion total land value, 1.89 billion acres, 24%/$1.8 trillion federal share).
2. IDEAS/RePEc, "New Estimates of Value of Land of the United States." RePEc — used to corroborate the working paper series/number, author affiliation, and JEL classification (E60).
3. Tim Worstall, "Fun Number: The US Is Worth $23 Trillion. Or, Why A Land Value Tax Won't Work," Forbes, April 23, 2015. Forbes — used for the contemporaneous critique illustrating how commentators extrapolated an annual-rent figure from Larson's stock estimate via an assumed capitalization rate, and the resulting revenue-sufficiency argument.
4. Bloomberg, "The Real Role of Land Values in the United States," April 10, 2015. Bloomberg — used to corroborate the headline figures and their contemporaneous reception as a citable government estimate.

[CITATION NEEDED: direct access to the full primary-text PDF (https://www.bea.gov/system/files/papers/WP2015-3.pdf returned a 404 in this session; a Stanford course mirror exists but could not be fetched) to verify page-level methodological detail, the paper's own stated caveats/limitations, and any explicit comparison to prior Federal Reserve Flow-of-Funds or residual-method land-value estimates. The headline figures ($23 trillion, 1.89 billion acres, 24%/$1.8 trillion federal share) are corroborated by the official BEA paper landing page and independently by RePEc and contemporaneous press coverage, so they are reported with confidence; finer methodological detail is not.]