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Valuing School Quality via a School Choice Reform

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  • Machin, Stephen

    ()
    (University College London)

  • Salvanes, Kjell G.

    ()
    (Norwegian School of Economics)

Abstract

Among policymakers, educators and economists there remains a strong, sometimes heated, debate on the extent to which good schools matter. This is seen, for instance, in the strong trend towards establishing accountability systems in education in many countries across the world. In this paper, in line with some recent studies, we value school quality using house prices. We, however, adopt a rather different approach to other work, using a policy experiment regarding pupils' choice to attend high schools to identify the relationship between house prices and school performance. We exploit a change in school choice policy that took place in Oslo county in 1997, where the school authorities opened up the possibility for every pupil to apply to any of the high schools in the county without having to live in the school's catchment area (the rule that applied before 1997). Our estimates show evidence that parents substantially value better performing schools since the sensitivity of housing valuations to school performance falls significantly by over 50% following the school choice reform.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4719.

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Length: 31 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:iza:izadps:dp4719

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Keywords: house prices; school performance; school reform;

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  1. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  2. Gibbons, Stephen & Machin, Stephen & Silva, Olmo, 2013. "Valuing school quality using boundary discontinuities," Journal of Urban Economics, Elsevier, vol. 75(C), pages 15-28.
  3. Sandra E. Black, 1997. "Do better schools matter? Parental valuation of elementary education," Research Paper, Federal Reserve Bank of New York 9729, Federal Reserve Bank of New York.
  4. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Working Papers, Center for Economic Studies, U.S. Census Bureau 07-27, Center for Economic Studies, U.S. Census Bureau.
  5. Stephen Gibbons & Stephen Machin, 2008. "Valuing school quality, better transport, and lower crime: evidence from house prices," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 24(1), pages 99-119, spring.
  6. Bogart, William T. & Cromwell, Brian A., 2000. "How Much Is a Neighborhood School Worth?," Journal of Urban Economics, Elsevier, vol. 47(2), pages 280-305, March.
  7. Bogart, William T. & Cromwell, Brian A., 1997. "How Much More is a Good School District Worth?," National Tax Journal, National Tax Association, vol. 50(2), pages 215-32, June.
  8. John Ries & Tsur Somerville, 2010. "School Quality and Residential Property Values: Evidence from Vancouver Rezoning," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 928-944, November.
  9. Gibbons, Steve & Machin, Stephen, 2003. "Valuing English primary schools," Journal of Urban Economics, Elsevier, vol. 53(2), pages 197-219, March.
  10. Thomas J. Kane & Douglas O. Staiger & Stephanie K. Riegg, 2005. "School Quality, Neighborhoods and Housing Prices: The Impacts of school Desegregation," NBER Working Papers 11347, National Bureau of Economic Research, Inc.
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Cited by:
  1. Falch, Torberg & Naper, Linn Renée, 2013. "Educational evaluation schemes and gender gaps in student achievement," Economics of Education Review, Elsevier, Elsevier, vol. 36(C), pages 12-25.
  2. repec:mab:wpaper:23 is not listed on IDEAS
  3. Schneider, Kerstin & Schuchart, Claudia & Weishaupt, Horst & Riedel, Andrea, 2012. "The effect of free primary school choice on ethnic groups — Evidence from a policy reform," European Journal of Political Economy, Elsevier, Elsevier, vol. 28(4), pages 430-444.
  4. Amy Ellen Schwartz & Ioan Voicu & Keren Mertens Horn, 2014. "Do Choice Schools Break the Link Between Public Schools and Property Values? Evidence from House Prices in New York City," Working Papers 2014_03, University of Massachusetts Boston, Economics Department.
  5. Jon H. Fiva & Olle Folke & Rune J. Sørensen, 2013. "The Power of Parties," CESifo Working Paper Series 4119, CESifo Group Munich.
  6. Boustan, Leah Platt, 2013. "Local public goods and the demand for high-income municipalities," Journal of Urban Economics, Elsevier, vol. 76(C), pages 71-82.

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