Title: Rent Seeking Definition
Headings: Rent Seeking
Rent Seeking
What Is Rent Seeking?
Key Takeaways
Understanding Rent Seeking
Rent Seeking Factors and Examples
Business Rent Seekers
Individual Rent Seekers
Licensing Requirements
Issues Arising from Rent Seeking

Content: The term rent in rent seeking is based on the economic definition of “rent,” which is defined as economic wealth obtained through shrewd or potentially manipulative use of resources. An example of rent seeking is when a company lobbies the government for grants, subsidies, or tariff protection. Understanding Rent Seeking
The concept of rent seeking was established in 1967 by Gordon Tullock and later popularized by Anne Krueger in 1974. It evolved from the studies of Adam Smith, who is often regarded as the father of economics, and is based on an economic definition of “rent,” defined as economic wealth obtained through shrewd or potentially manipulative use of resources. Smith's studies suggested that entities earn income from wages, profit, and rent. To create profit usually requires the risk of capital with the goal of gaining a return. Earning wages comes from employment. However, of the three income sources, rent is the easiest to obtain and can require little risk. Economic rent is the income earned from the utilization of resource ownership. Entities that own resources can lend them to earn interest rents, lease them to earn rental income, or they may utilize their resources in other income-producing ways.