Capitalization of Public Goods and Its Distribution Effect: Empirical Evidences and Policy Implications in China

Abstract

Capitalization of public goods refers to the economic phenomenon that some assets absorb the cost of public goods and the prices of assets rise consequently. It results in an interpersonal and interregional income distribution effect. The distribution effect from capitalization of public goods illuminates that it is reasonable to levy property tax and provide more public goods in rural areas.