How Much do Public Schools Really Cost? Estimating the Relationship between House Prices and School Quality
This paper investigates the relationship between housing prices and the quality of public schools in the Australian Capital Territory. To disentangle the effects of schools and other neighbourhood characteristics on the value of residential properties, we compare sale prices of homes on either side of high school attendance boundaries. We find that a 5 percentage point increase in test scores (approximately 1 SD) is associated with a 3.5 per cent increase in house prices. Our result is in line with private school tuition costs, and accords with prior research from the UK and the USA. Estimating the effect of school quality on house prices provides a possible measure of the extent to which parents value better educational outcomes. Copyright © 2008 The Economic Society of Australia.
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Volume (Year): 84 (2008)
Issue (Month): 265 (06)
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- Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
- 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.
- Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, Oxford University Press, vol. 114(2), pages 577-599.
- Steve Bradley & Mirko Draca & Colin Green, 2004. "School Performance in Australia: Is There a Role for Quasi-Markets?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 37(3), pages 271-286, 09.
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