When do better schools raise housing prices? Evidence from Paris public and private schools
AbstractIn this paper, we investigate how housing prices react to the quality of education offered by neighboring public and private schools. The organization of secondary schooling in the city of Paris, which combines residence-based assignment to public schools with a well-developed and almost entirely publicly funded private school system, offers a valuable empirical context for analyzing how private schools affect the capitalization of public school performance in housing prices. Using comprehensive data on both schools and real estate transactions over the period 1997-2004, we develop a matching framework to carefully compare sales across school attendance boundaries. We find that a standard deviation increase in public school performance raises housing prices by 1.4 to 2.4%. Moreover, we show that the capitalization of public school performance in the price of real estate shrinks as the availability of private schools increases in the neighborhood. Our results confirm the predictions of general equilibrium models of school choice that private schools, by providing an advantageous outside option to parents, tend to mitigate the impact of public school performance on housing prices.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Public Economics.
Volume (Year): 94 (2010)
Issue (Month): 1-2 (February)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505578
School attendance zones Private schools Housing markets Residential segregation;
Other versions of this item:
- Gabrielle Fack & Julien Grenet, 2010. "When do Better Schools Raise Housing Prices? Evidence from Paris Public and Private Schools," CEE Discussion Papers 0119, Centre for the Economics of Education, LSE.
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- The link between schools and house prices is now an established fact
by Blog Admin in British Politics and Policy at LSE on 2012-09-25 07:00:30
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