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Elite school designation and housing prices-quasi-experimental evidence from Beijing, China✰

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  • Huang, Bin
  • He, Xiaoyan
  • Xu, Lei
  • Zhu, Yu

Abstract

We explore recent policy changes which aim to equalize access to elite elementary schools in Beijing in order to identify the effect of access to quality education on housing prices. Using property transaction records from Beijing over the period 2013–2016, we construct a balanced panel of residential complexes, each of which is linked to designated primary schools. Whereas the multi-school dicing policy involves randomly assigning previously ineligible pupils to key elementary schools through lotteries, the policy of school federation led by elite schools consolidates ordinary primary schools through alliances with elite schools. Moreover, a residential complex in an ordinary primary school catchment can be reassigned to a key elementary school catchment through a “pure” re-designation effect. We allow for systemic differences between the treated and non-treated residential complexes using the Matching Difference-in-Differences (MDID) approach. Our estimates indicate that the effect on house prices of being eligible to enrol in a municipal-level key primary school is about 4–8%, while the premium for being eligible for a less prestigious district-level key primary school is only about 2–3%. Our findings are robust to two alternative measures of primary school prestige: an unofficial ranking from a popular parenting support website; and the number of awards in academic tournaments.

Suggested Citation

  • Huang, Bin & He, Xiaoyan & Xu, Lei & Zhu, Yu, 2020. "Elite school designation and housing prices-quasi-experimental evidence from Beijing, China✰," Journal of Housing Economics, Elsevier, vol. 50(C).
    • Handle: RePEc:eee:jhouse:v:50:y:2020:i:c:s1051137720300668
    DOI: 10.1016/j.jhe.2020.101730
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    Cited by:

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    3. Lirong Hu & Shenjing He, 2024. "Entrance opportunity vs. academic performance: unpacking the nonlinear capitalization effects of multidimensional school qualities on housing sales and rental prices," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.
    4. Zheng Zhu & Qingyun He & Xiang Zhu, 2022. "Spatial Analysis for the Landscape Visual Aesthetic Quality of Urban Residential Districts Based on 3D City Modeling," Sustainability, MDPI, vol. 14(18), pages 1-28, September.
    5. Xiao Tian & Jin Liu & Yong Liu, 2022. "How Does the Quality of Junior High Schools Affect Housing Prices? A Quasi-Natural Experiment Based on the Admission Reform in Chengdu, China," Land, MDPI, vol. 11(9), pages 1-18, September.
    6. Xu, Yuanwei & Wang, Feicheng, 2022. "The health consequence of rising housing prices in China," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 114-137.
    7. Jin, Zhiyun & Wang, Xingrui & Huang, Bin, 2023. "The enrolment reform of schools and housing price: Empirical evidence from Shanghai, China," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 262-273.
    8. Ouyang, Yanyan & Cai, Hongbo & Yu, Xuefei & Li, Zijian, 2022. "Capitalization of social infrastructure into China's urban and rural housing values: Empirical evidence from Bayesian Model Averaging," Economic Modelling, Elsevier, vol. 107(C).
    9. Ziming Liu & Jiayu Ye & Guangcheng Ren & Shuyi Feng, 2022. "The Effect of School Quality on House Prices: Evidence from Shanghai, China," Land, MDPI, vol. 11(11), pages 1-14, October.

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    More about this item

    Keywords

    Quality school designation; House price premium; Matching DID; China;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets

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