Land taxation and the Henry George theorem under uncertainty

This paper considers land taxation under uncertainty. At an optimal population of a jurisdiction, aggregate land rents of a jurisdiction equal expenditures on a public good, dubbed the Henry George theorem. As a consequence, the public good in a jurisdiction should be financed only by land taxes. However, in the presence of uncertainty, the size of population serves as insurance. It is thus efficient to increase the size of population beyond the optimal level with certainty, and land rents exceed public good costs.