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Valuing primary schools in urban China

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  • Chan, Jimmy
  • Fang, Xian
  • Wang, Zhi
  • Zai, Xianhua
  • Zhang, Qinghua

Abstract

We study the effect of school quality on housing prices in urban China. Our objective is to provide an estimate of the school-quality premium based on the best available data. To account for unobserved neighborhood characteristics, we adopt the boundary-discontinuity design of Black (1999) and the matching strategy proposed by Fack and Grenet (2010). The results suggest that parents value public primary schools that have outstanding records in academic tournaments. The school-quality premium is highly non-linear. While a tournament superstar—a school above the 90th percentile in tournament performance—causes housing prices in its neighborhood to increase by 14 percent, or about 430,000 RMB, the price difference between non-superstar schools is small.

Suggested Citation

  • Chan, Jimmy & Fang, Xian & Wang, Zhi & Zai, Xianhua & Zhang, Qinghua, 2020. "Valuing primary schools in urban China," Journal of Urban Economics, Elsevier, vol. 115(C).
    • Handle: RePEc:eee:juecon:v:115:y:2020:i:c:s009411901930052x
    DOI: 10.1016/j.jue.2019.103183
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    3. Frances Xu Lee & Wing Suen, 2023. "Gaming A Selective Admissions System," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(1), pages 413-443, February.
    4. Xuejuan Su & Huayi Yu, 2022. "Valuing elementary schools: evidence from public school acquisitions in Beijing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(4), pages 1117-1141, October.
    5. Xiaokuai Shao, 2021. "Matching under school and home bundling," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(3), pages 567-611, June.
    6. Deng, Kuang Kuang & Lang, Henan & Zhou, Xiaoxia, 2022. "Extrapolation and house price overreaction: Evidence from local jurisdiction mergers," Finance Research Letters, Elsevier, vol. 44(C).
    7. Pengyu Zhu & Yi Zhang & Juan Wang, 2023. "Canceling the admission priority of private schools enlarges housing price gap in public school districts: Evidence from Shanghai's new admission policy," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(1), pages 49-67, January.
    8. Huang, Wei & Li, Teng & Pan, Yinghao & Ren, Jinyang, 2023. "Teacher characteristics and student performance: Evidence from random teacher-student assignments in China," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 747-781.
    9. 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).
    10. Kehao Zhou & Ronghui Tan, 2022. "More Than Thirty Years of Environmentally Sensitive Area Loss in Wuhan: What Lessons Have We Learned from Urban Containment Policy?," Land, MDPI, vol. 11(8), pages 1-20, August.
    11. Yongbin Huang & Hai Hong, 2023. "The heterogeneous impact of house purchase limits policy on housing prices: Comparison between elite and non‐elite school district houses," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(5), pages 1055-1078, September.
    12. Crocker H. Liu & Patrick S. Smith, 2023. "School quality as a catalyst for bidding wars and new housing development," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(4), pages 785-818, July.
    13. Ding, Kangzhe & Itoh, Ryo, 2023. "JUE Insight: The impact of the school admission restriction policy on the housing market in Shanghai," Journal of Urban Economics, Elsevier, vol. 136(C).
    14. Pang, Jindong & Shen, Shulin & Zhou, Ningzhe, 2024. "The Spillover effect of government relocations on economic growth in Chinese cities," Journal of Economic Behavior & Organization, Elsevier, vol. 222(C), pages 104-122.
    15. Tan, Ronghui & Xu, Shuxian, 2023. "Urban growth boundary and subway development: A theoretical model for estimating their joint effect on urban land price," Land Use Policy, Elsevier, vol. 129(C).
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    18. Liu, Lu & Meng, Lina & Zhang, Ruige, 2024. "Does Easy Accessibility to Urban Parks Always Raise Home Values?," Journal of Housing Economics, Elsevier, vol. 63(C).

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    More about this item

    Keywords

    Housing transaction prices; School quality; Boundary discontinuities; Matching strategy; China;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • I2 - Health, Education, and Welfare - - Education
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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