Optimal municipal investment in boomtowns An empirical analysis

The primary concern of this paper is the use of wage-infrastructure trade-offs as a measure for the social benefits of municipal infrastructure in boomtowns. A regression based on pooled cross sectional and time series data for 26 towns in the Rocky Moutain region suggests that individuals will “trade off” a 1% increase in per capita stocks of municipal infrastructure for a 0.035% decline in wages. These results are then used to calculate “optimal” levels of infrastructure investment for an example boomtown.