Will They Still Kill Each Other For This?
Economic analysis of land acquisition through war and some alternative means
By Jim Thio
In the movie Munich, a Palestinian character says that they will fight and sacrifice all their kids for the land if it means they’ll eventually have it after 300 years.
The story goes that the Jews also want the land so much that they’ve been fighting and trying to get it for some 1900 years. And so is the IRA, the independence movements, and so on and on…
That obviously begs the mother of all questions for arguments in favor or against war. It’s so important I am going to put it in very big bold letters.
What’s the Present Value of Future Ownership of Land after 300 Years?
Let’s presume that real estate entrepreneurs are so efficient they don’t charge money. Let’s presume that the interest rate is 5% higher than the price increase of the land. So money in a bank grows 5% faster than land price increase.
The answer of the above question would be 0.00000043975448738 of the current value of the land.
Another way to come with the number is to deduct the value of the land with the rent
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