Private Schools and the Willingness to Pay for Public Schooling
AbstractHouseholds pay a premium to live in houses assigned to high quality public schools, and the housing market yields information about the demand for public school quality. The current study estimates a two-stage house price hedonic emphasizing the role that private schools play in the willingness to pay for public school quality. The elasticity of house prices with respect to public school quality is 0.15, and 0.04 with respect to private school quality. The price elasticity of demand for public schooling is -1.72, with an income elasticity of 0.31. Public and private schools are substitutes, with a cross-price elasticity of 0.32. A school choice program that reduced private school tuition by 10 percent would reduce the willingness to pay for public school performance by 1.9 percent. The magnitude of the results generally varies markedly between large and small houses, with large houses more responsive to public and private schooling variables. © 2007 American Education Finance Association
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Bibliographic InfoArticle provided by MIT Press in its journal Education Finance and Policy.
Volume (Year): 2 (2007)
Issue (Month): 2 (February)
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Web page: http://mitpress.mit.edu/journals/
Find related papers by JEL classification:
- I20 - Health, Education, and Welfare - - Education - - - General
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
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- John Yinger, 2009. "Hedonic Markets and Explicit Demands: Bid-Function Envelopes for Public Services, Neighborhood Amenities, and Commuting Costs," Center for Policy Research Working Papers 114, Center for Policy Research, Maxwell School, Syracuse University.
- Christafore, David & Leguizamon, Susane, 2012. "The influence of gay and lesbian coupled households on house prices in conservative and liberal neighborhoods," Journal of Urban Economics, Elsevier, vol. 71(2), pages 258-267.
- James LeSage & Joni Charles, 2008. "Using home buyers’ revealed preferences to define the urban–rural fringe," Journal of Geographical Systems, Springer, vol. 10(1), pages 1-21, March.
- Kelley Pace, R. & LeSage, James P., 2008. "A spatial Hausman test," Economics Letters, Elsevier, vol. 101(3), pages 282-284, December.
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