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Delegating Eminent Domain Powers to Private Firms: Land Use and Efficiency Implications

Posted: 23 Aug 2012  

Geoffrey K. Turnbull

Georgia State University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 2012

Abstract

Many private common carriers or regulated utilities have eminent domain powers in the U.S. The rationale resembles that for local governments; lower cost of assembling land for long distance electric transmission, gas and oil products pipelines, etc. Recent court cases raise questions about whether eminent domain allows firms to use inefficiently long indirect land corridors, inefficiently wide corridors, or higher value land when lower value land is available as an alternative? Despite the incentive to overuse capital under rate-of-return regulation, it turns out that the firm adopts an excessive land corridor width only to the extent that corridor width is tied to capital usage. For route selection, rate-of-return regulated firms follow the same Pareto rule that would be followed by an efficiency-oriented government when designating which land to take for a transmission route by eminent domain.

Keywords: Private eminent domain, Public use, Regulated firm

JEL Classification: K11, R14, R38

Suggested Citation

Turnbull, Geoffrey K., Delegating Eminent Domain Powers to Private Firms: Land Use and Efficiency Implications (2012). Journal of Real Estate Finance and Economics, Vol. 45, No. 2, 2012. Available at SSRN: https://ssrn.com/abstract=2134984

Geoffrey Turnbull (Contact Author)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-651-0419 (Phone)
404-651-2737 (Fax)

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