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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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    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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