ABSTRACTWe apply the implicit price approach to land to clarify how the various kinds of public expenditure affect land prices. By presupposing that the changing state of typical land characteristics — accessibility and environmental quality — can be expressed in differential equation form, we apply the Maximum Principle to clarify how each of the characteristics of land reacts to public investment in transportation and environmental conservation. We thereby estimate the dynamic behavior of the implicit price of land. The literature suggests that financial resources for further public expenditure (on such aspects as transportation and environmental conservation) should be partly realizable from the increased land price accruing as a result of expenditures in the p