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According to the Tiebout hypothesis, people seek for a ba-
lance between the level of local services and tax burden.If
this point of view is acceptable, the level of the entire
local ser- vices makes a notable impact on individual''s
selection of his residential location. In fact, the benefit
from the local ser- vices are determined within a limited
range of standard public goods. Hence, the benefit shared
differ among the various resi- dential districts. In other
words, the quality of local services have a great effect on
the demand of the housing price. The higher the level of
local services are, the greater the effects are. Nevertheless,
the local services are proposed according to the government
decree, it doesn''t exist in the practical trading market. The
increasing effects can''t be estimated with the usual cost or
income approach. It is termed positive capitalization effects
if the housing price increases. As a result, the positive
capitalization effects are found. The level of local service
shows positively correlated with the housing price. However it
differs from locations、 the charac- teristics of the
neighborhood unit sand the elements of the time in Taichung
City. It also differs according to the development of the
interjurisdiction location; the capitalization effects in the
higher developed Western District is comparatively lower than
the less developed Northern District.
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