IDEAS home Printed from https://ideas.repec.org/a/bla/reesec/v51y2023i1p49-67.html
   My bibliography  Save this article

Canceling the admission priority of private schools enlarges housing price gap in public school districts: Evidence from Shanghai's new admission policy

Author

Listed:
  • Pengyu Zhu
  • Yi Zhang
  • Juan Wang

Abstract

In 2018, Shanghai implemented an admission policy that canceled the admission priority of private schools to promote education equity. Since this policy is a unique measure for adjusting private and public school competition and discouraging private school choice priority, little is known about the policy effects. In this research, to examine the impact of the new admission policy on the capitalization of public education quality, we apply boundary fixed effect and Difference in Differences (DID) analysis to housing transaction records before and after the policy. The admission policy on average led to an additional 2% housing price premium for every standard deviation increase in public school quality. However, this average increase in premium was mainly driven by elite (top 5%) school districts, where an additional 8.6% housing price premium was generated by the policy. Housing prices in nonelite school districts, on the other hand, demonstrated no significant changes. These results indicate that the policy enlarges the housing price gap among school districts with different education quality. Thus, rather than promoting education equity, this policy may overall worsen the housing affordability in good public‐school districts and make access to quality education more exclusive.

Suggested Citation

  • 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.
    • Handle: RePEc:bla:reesec:v:51:y:2023:i:1:p:49-67
    DOI: 10.1111/1540-6229.12403
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1540-6229.12403
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1540-6229.12403?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Stephen Machin & Kjell G. Salvanes, 2016. "Valuing School Quality via a School Choice Reform," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(1), pages 3-24, January.
    2. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(2), pages 577-599.
    3. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, August.
    4. 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).
    5. Fack, Gabrielle & Grenet, Julien, 2010. "When do better schools raise housing prices? Evidence from Paris public and private schools," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 59-77, February.
    6. Dhar, Paramita & Ross, Stephen L, 2012. "School district quality and property values: Examining differences along school district boundaries," Journal of Urban Economics, Elsevier, vol. 71(1), pages 18-25.
    7. 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.
    8. Zhang, Muyang & Chen, Jie, 2018. "Unequal school enrollment rights, rent yields gap, and increased inequality: The case of Shanghai," China Economic Review, Elsevier, vol. 49(C), pages 229-240.
    9. Huang, Bin & He, Xiaoyan & Xu, Lei & Zhu, Yu, 2020. "Elite School Designation and Housing Prices: Quasi-Experimental Evidence from Beijing, China," IZA Discussion Papers 12897, Institute of Labor Economics (IZA).
    10. Imberman, Scott A. & Lovenheim, Michael F., 2016. "Does the market value value-added? Evidence from housing prices after a public release of school and teacher value-added," Journal of Urban Economics, Elsevier, vol. 91(C), pages 104-121.
    11. Feng, Hao & Lu, Ming, 2013. "School quality and housing prices: Empirical evidence from a natural experiment in Shanghai, China," Journal of Housing Economics, Elsevier, vol. 22(4), pages 291-307.
    12. Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March.
    13. Andreyeva, Elena & Patrick, Carlianne, 2017. "Paying for priority in school choice: Capitalization effects of charter school admission zones," Journal of Urban Economics, Elsevier, vol. 100(C), pages 19-32.
    14. Black, Sandra E. & Machin, Stephen, 2011. "Housing Valuations of School Performance," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 3, chapter 10, pages 485-519, Elsevier.
    15. Brunner, Eric J. & Cho, Sung-Woo & Reback, Randall, 2012. "Mobility, housing markets, and schools: Estimating the effects of inter-district choice programs," Journal of Public Economics, Elsevier, vol. 96(7), pages 604-614.
    16. Leonardo Bonilla‐Mejía & Esteban Lopez & Daniel McMillen, 2020. "House prices and school choice: Evidence from Chicago's magnet schools’ proximity lottery," Journal of Regional Science, Wiley Blackwell, vol. 60(1), pages 33-55, January.
    17. Maria Marta Ferreyra, 2007. "Estimating the Effects of Private School Vouchers in Multidistrict Economies," American Economic Review, American Economic Association, vol. 97(3), pages 789-817, June.
    18. Chung, Il Hwan, 2015. "School choice, housing prices, and residential sorting: Empirical evidence from inter-and intra-district choice," Regional Science and Urban Economics, Elsevier, vol. 52(C), pages 39-49.
    19. Reback, Randall, 2005. "House prices and the provision of local public services: capitalization under school choice programs," Journal of Urban Economics, Elsevier, vol. 57(2), pages 275-301, March.
    20. Michael L. Walden, 1990. "Magnet Schools and the Differential Impact of School Quality on Residential Property Values," Journal of Real Estate Research, American Real Estate Society, vol. 5(2), pages 221-230.
    21. Nguyen-Hoang, Phuong & Yinger, John, 2011. "The capitalization of school quality into house values: A review," Journal of Housing Economics, Elsevier, vol. 20(1), pages 30-48, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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).
    2. 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.
    3. Chung, Il Hwan, 2015. "School choice, housing prices, and residential sorting: Empirical evidence from inter-and intra-district choice," Regional Science and Urban Economics, Elsevier, vol. 52(C), pages 39-49.
    4. Eli Beracha & William G. Hardin, 2021. "The housing price premium associated with charter schools," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 49(4), pages 1267-1289, December.
    5. Hu, Lirong & He, Shenjing & Luo, Yun & Su, Shiliang & Xin, Jing & Weng, Min, 2020. "A social-media-based approach to assessing the effectiveness of equitable housing policy in mitigating education accessibility induced social inequalities in Shanghai, China," Land Use Policy, Elsevier, vol. 94(C).
    6. 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).
    7. Huang, Bin & He, Xiaoyan & Xu, Lei & Zhu, Yu, 2020. "Elite School Designation and Housing Prices: Quasi-Experimental Evidence from Beijing, China," IZA Discussion Papers 12897, Institute of Labor Economics (IZA).
    8. Yi Huang & Sandy Dall’erba, 2021. "Does Proximity to School Still Matter Once Access to Your Preferred School Zone Has Already Been Secured?," The Journal of Real Estate Finance and Economics, Springer, vol. 62(4), pages 548-577, May.
    9. repec:mab:wpaper:23 is not listed on IDEAS
    10. 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.
    11. 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.
    12. Schwartz, Amy Ellen & Voicu, Ioan & Horn, Keren Mertens, 2014. "Do choice schools break the link between public schools and property values? Evidence from house prices in New York City," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 1-10.
    13. Andreyeva, Elena & Patrick, Carlianne, 2017. "Paying for priority in school choice: Capitalization effects of charter school admission zones," Journal of Urban Economics, Elsevier, vol. 100(C), pages 19-32.
    14. 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).
    15. Chen, Jing & Li, Rui, 2023. "Pay for elite private schools or pay for higher housing prices? Evidence from an exogenous policy shock," Journal of Housing Economics, Elsevier, vol. 60(C).
    16. Caetano, Gregorio, 2019. "Neighborhood sorting and the value of public school quality," Journal of Urban Economics, Elsevier, vol. 114(C).
    17. Yoojin Yi & Euijune Kim & Eunjin Choi, 2017. "Linkage among School Performance, Housing Prices, and Residential Mobility," Sustainability, MDPI, vol. 9(6), pages 1-18, June.
    18. Greaves, Ellen & Turon, Hélène, 2024. "School Choice and Neighborhood Sorting: Equilibrium Consequences of Geographic School Admissions," IZA Discussion Papers 16805, Institute of Labor Economics (IZA).
    19. Melser, Daniel & Moallemi, Morteza & Kim, Jun Sung, 2021. "Preferences for single-sex schools: Evidence from the housing market," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 710-726.
    20. Kang Mo Koo & Jerry Liang, 2021. "The Effect of Bilingual Education on Housing Price-a Case Study of Bilingual School Conversion," The Journal of Real Estate Finance and Economics, Springer, vol. 62(4), pages 629-664, May.
    21. Michio Naoi, 2020. "School Quality and Residential Property Values: A Review of Recent Developments and Applications," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 16(6), pages 1-23, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:reesec:v:51:y:2023:i:1:p:49-67. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/areueea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.