ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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A New Price Regime

Land Markets in Urban and Rural India

Land prices in urban and rural India have increased rapidly in the last decade - fivefold in urban areas and possibly more in some rural settings. Using comparable international data, this paper shows that urban prices are significantly higher than is commensurate with income and that the peaks of these prices are extraordinarily high. Similarly, rural prices in several regions are very high by international standards. It argues that the present conditions can be explained by a combination of increasing land scarcity with increasing money supply - from expanded housing credit, and rising incomes from white, black, and foreign sources - and increasing income and wealth inequality. All of which means this is no mere bubble.

This paper is part of a larger study conducted during a sabbatical from Temple University, the US and supported by the Center for the Advanced Study of India at the University of Pennsylvania. I am grateful to these institutions and the many colleagues who have commented on the study.

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