When a public goods increases the desirability of living in a certain area,benefits tend to be captured entirely by an increase in land values.

Question

Quizplus · Accepted Answer

This is because the increase in demand for living in an area with a desirable public good leads to an increase in the demand for land in that area, which drives up land prices. As a result, land owners capture the benefits in the form of increased land values.

When a Public Goods Increases the Desirability of Living in a Certain