Economic Rent: Reason Why Musicians earn more money than Graduates and higher degree holders

 Just recently, I saw a post on Facebook which reads..."After four years in the university with 1 extra year for carryovers, 2 years of Masters Degree and I'm still broke while someone is making money with 'Skiboroboskibo osheee (lil kesh's slogan) lolzzz. It is funny though but it is true. So many entertainers are making more money than many graduates, the reason for this is
what Economists call Economic Rent.
This Rent is different from the rent you pay to your landlord at the end of the month or year. Economic Rent can simply be explained as the extra amount a factor of production gets above or over the amount necessary to put it in use. Using a person as an example, it is an extra amount paid to a person which is above what he normally should have collected for the Job. For instance, a musician like 2baba collects 5 million Naira for one show and let's assume the cheapest star musician is Korede Bello and he collects 500,000 Naira for one show, then 2baba is earning an Economic Rent of 4.5million. In essence, the amount needed to get a star musician to perform at your show is 500,000 Naira but some musicians could charge as high as 5 million Naira thereby earning Economic Rent. Another example is that of Land, in the village, a plot of land could cost 1 million Naira but in Abuja, the same plot could cost 10 million Naira. Both plots of land are of the same size but the owner of the Land in Abuja is earning Economic Rent. You may get to wonder why it has to be that way.
The simplest explanation as to why the examples above get economic rent while others do not is because the qualities found in these examples mentioned cannot be produced or duplicated by man, obviously there is no competition. No amount of education or practice in the world can turn a person to 2baba, you can only be like him but you can never be him. So if I want 2baba Idibia to come perform at my birthday party, I will have to pay whatever amount he asks for and he can charge as high as he wants to earn Economic rent. If there were to be another 2baba, then competition sets in, the price becomes less, eliminating Economic rent. In other words, musicians earn Economic rent because of their TALENT.
On that of Land, the landowner in the village cannot move his land to Abuja to compete with the land in Abuja to earn economic rent. It's not by choice that land are in villages and are cheap while others of the same plot are in the cities and are sold at very high prices. Trust me, if it were possible, I would have moved that of my grandfather's to Abuja. lolzz.
The land owner in Abuja is earning Economic Rent as a result of NATURE. Another source of Economic rent is Patent, I'l discuss that in my next post. Stay posted.
What's your take on this? Comment below.