When I was a kid, I visited the Lake of the Ozarks in Missouri with my dad. It was around 2001 or 2002, and we were walking through a parkland path that would lead you to great views overlooking the lake. There was very modest lakefront construction at the time, and large tracts of idle area. At some point, my dad said to me, “Timmy, come back here in ten to fifteen years, and this will all be built out.”
My dad was right. When I visited the area again earlier this summer, I saw that there was property construction as far as the eye could see–in fact, I couldn’t find any extended area of lakefront land that wasn’t being developed.
My dad’s intuition about the future development of Ozark property is often described in economic textbooks as the “highest valued use” hypothesis. This theory assumes that the ultimate ownership … Read the rest of this article!