## 4 Land and Economics  
Land appeared in economics at a very early stage of the history of this discipline. Initially it had a prominent role, arguably reflecting the crucial position of agricultural activities in the 18 th century society. In his seminal contribution to the economic science, the physiocrat [PERSON] (2000), who is often seen as the first author to publish a modern economic treaty ([PERSON], 2000), put land at the center of his theory of value. According to [PERSON] (2000), which has the merit of having formalized in a modern and rigorous manner [PERSON]'s thought, the physiocrat author gave birth to an original \"_land theory of value_\", where ultimately all production factors were reduced to (indirect) land. Compared to [PERSON], who was mainly looking at a largely pre-capitalist society, the classical economists were already aware of the rapid ascent of capitalism. They witnessed directly the deep changes that it was producing in the economy and in the society. In this sense, [PERSON], [PERSON], and [PERSON] gradually began to lose interest in land, while concentrating their efforts in understanding better the novelties of labor and capital within the new capitalistic global order. Nonetheless, [PERSON] (2000)introduced the idea that the fertility of land--and thus its productivity--is the main determinant of the agricultural land rent, therefore driving the economic value of this resource. The simple intuition behind the so-called _\"Ricardian approach\"_ to land--suggesting that the land value can be measured in terms of its agricultural productivity, using for instance measures such as the average or net revenue per hectare for specific crops--is still used and debated at present days. For instance, in an article that appeared in 1994 on the _American Economic Review_, [PERSON], [PERSON], and [PERSON] assessed the impact of climate change on US agriculture looking at farmland prices and farm revenues, explicitly acknowledging their work as based on a _\"Ricardian approach\"_([PERSON], 2016) (p. 755):  
\"In this study, we develop a new technique that in principle can correct for the bias in the production-function technique by using economic data on the value of land. We call this the Ricardian approach, in which, instead of studying yields of specific crops, we examine how climate in different places affects the net rent or value of farmland. By directly measuring farm prices or revenues, we account for the direct impacts of climate on yields of different crops as well as the indirect substitution of different inputs, introduction of different activities, and other potential adaptations to different climates. If markets are functioning properly, the Ricardian approach will allow us to measure the economic value of different activities and therefore to verify whether the economic impacts implied by the production-function approach are reproduced in the field\"  
While having some advantages, including the possibility to account for farmers' adaptation to climate change with relatively less data compared to other methods, the _Ricardian approach_ has a strong limitation: it assumes that the land market, together with other related markets, are operating in perfect conditions. If this assumption might stand--at least to some extent--in land and real estate markets in the most advanced economies, it is hard to think that it can reflect the reality in most of developing countries, which also happen to be the most targeted areas by LSLAs. In addition to this, [PERSON] (2017) argued that the application of Ricardian techniques can lead to biased results, especially in the presence of \"unobservable determinants of land value\" (Ibid., p.120) varying across different possible land uses. Therefore, it is not a coincidence that [PERSON], as opposed to the US agriculture case studied by [PERSON] and his colleagues (2017), decided to focus his empirical work on Brazil, a complex and vast developing country, rich in both \"unobservable determinants of land values\" and alternative land uses.