Based on the Gansu Survey of Children and Families (GSCF, 2007), this thesis investigates the hierarchical effects of teacher personal characteristics and teaching job attributes as determinants of wages and sources of variations from the perspective of Hedonic Wage Theory. Based on the Hedonic Wage Theory, this study has made use of a scientific sampled micro data set to analyze teacher wage disparities in rural Gansu, which is a typical less-developed northwestern remote province in Mainland China. Hierarchical Linear Modeling(HLM) is employed to study the regional effects. Major foci of this thesis consist of: (1)The nature and strength of economic values of teacher personal characteristics and teaching job attributes. (2)The substitution between pecuniary rewards from wages and non-pecuniary benefit derived from working conditions and living amenities, and its implications for teacher personnel costs. (3)How regional policies are related to teacher wage variations and what can government do to narrow the consequential gap in education service. The conclusions of the study include: Both teacher personal characteristics and teaching job attributes are major determining factors of wages. Human capital components proxying higher teacher quality are positively compensated, while better daily working and living conditions are paid in the form of lower wages. In other words, hardships are associated with compensating wage differentials. Working conditions in schools and living conditions in community where the teaching position is located are substitutable with wages. The substitution between wages and job conditions varies from -0.03 to 0.05. Negative values mean that teachers are willing to accept lower wages to work in a better-off county. It costs more for hard-to-staff regions to recruit a comparable teacher. In consideration of wage compensations, the "Helping the Poor" policy can give a better indication than the "Subsidy to Remote and Difficult Districts Scheme". Dis-utilities from uncomfortable working and living environment in poor counties cost 15% extra wage expenditures. Accounting for teacher utility preference, disadvantageous counties classified by economic-geographic features should be financially aided based on teacher cost index(TCI) to recruit and retain quality teachers. Simulation implies that counties labeled as "poor" should be provided 10% more marginal personnel budget in order to hire an average teacher who meets the basic education requirements. However, fiscal assistances based on degree of remoteness do not show consistent patterns. The most remote counties can hire a comparable teacher at a cost of only 74% of the average, while those second most remote ones pay 3.6-11.8% more. There are two major policy implications from the results of the study: (1)The "Subsidy to Remote and Difficult Districts Scheme" and the "Helping the Poor" policy have different focuses. Though the former scheme may have public-goods considerations, the latter can give a clear and differentiative policy implication for education finance. (2)It would be an equitable and efficient way to incorporate uncontrollable external factors into a teacher wage index(TCI), and to use it to adjust education financial strategies to these difficult areas.