Wages, land prices, and local public goods in Thailand

Using a hedonic pricing model for provincial land prices and provincial wages, we estimate the effects of differences in the availability of local public goods in the provinces of non-urban Thailand for the period from 1996 to 2002. We observe that local public goods can indeed explain differences in provincial wages and land prices. Infrastructure is significantly more important than welfare-related facilities or local school quality. For most local public goods the productivity-increasing effects dominate their utility-enhancing properties.