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Is comprehensive education really free?: a case‐study of the effects of secondary school admissions policies on house prices in one local area

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  • Dennis Leech
  • Erick Campos

Abstract

Summary. The paper reports on a study that tests the anecdotal hypothesis that parents are willing to pay a premium to secure places for their children in popular and oversubscribed comprehensive schools. Since many local education authorities use admissions policies that are based on catchment areas and places in popular schools are very difficult to obtain from outside these areas—but very easy from within them—parents have an incentive to move house for the sake of their children's education. This would be expected to be reflected in house prices. The study uses a cross‐sectional sample based on two popular schools in one local education authority area, Coventry. Differences in quality of housing are dealt with by using the technique of hedonic regression and differences in location by sample selection within a block sample design. The sample was chosen from a limited number of locations spanning different catchment areas to reduce both observable and unobservable variability in nuisance effects while maximizing the variation in catchment areas. The results suggest that there are strong school catchment area effects. For one of the two popular schools we find a 20% premium and for the other a 16% premium on house prices ceteris paribus.

Suggested Citation

  • Dennis Leech & Erick Campos, 2003. "Is comprehensive education really free?: a case‐study of the effects of secondary school admissions policies on house prices in one local area," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 166(1), pages 135-154, February.
    • Handle: RePEc:bla:jorssa:v:166:y:2003:i:1:p:135-154
    DOI: 10.1111/1467-985X.00263
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    References listed on IDEAS

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    1. 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.
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    Citations

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    Cited by:

    1. Rebecca Allen & Simon Burgess & Tomas Key, 2010. "Choosing secondary school by moving house: school quality and the formation of neighbourhoods," DoQSS Working Papers 10-21, Quantitative Social Science - UCL Social Research Institute, University College London.
    2. Rebecca Allen & Simon Burgess & Leigh McKenna, 2010. "How should we treat under-performing schools? A regression discontinuity analysis of school inspections in England," DoQSS Working Papers 10-20, Quantitative Social Science - UCL Social Research Institute, University College London.
    3. David Mayston, 2007. "Competition And Resource Effectiveness In Education," Manchester School, University of Manchester, vol. 75(1), pages 47-64, January.
    4. 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.
    5. Steve Gibbons & Stephen Machin, 2004. "Paying for primary schools: supply constraints, school popularity or congestion?," CEE Discussion Papers 0042, Centre for the Economics of Education, LSE.
    6. Bernard Fingleton, 2008. "Housing Supply, Housing Demand, and Affordability," Urban Studies, Urban Studies Journal Limited, vol. 45(8), pages 1545-1563, July.
    7. Sofia N. Andreou & Panos Pashardes, 2012. "Consumers’ Valuation of Level and Egalitarian Education Attainment of Schools in England," University of Cyprus Working Papers in Economics 10-2012, University of Cyprus Department of Economics.
    8. Jennings, Colin, 2015. "Collective choice and individual action: Education policy and social mobility in England," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 288-297.
    9. Jae Hong Kim & Francesca Pagliara & John Preston, 2005. "The Intention to Move and Residential Location Choice Behaviour," Urban Studies, Urban Studies Journal Limited, vol. 42(9), pages 1621-1636, August.
    10. Paul Cheshire & Stephen Sheppard, 2004. "Capitalising the Value of Free Schools: The Impact of Supply Characteristics and Uncertainty," Economic Journal, Royal Economic Society, vol. 114(499), pages 397-424, November.
    11. Bark, R.H. & Osgood, D.E. & Colby, B.G. & Katz, G. & Stromberg, J., 2009. "Habitat preservation and restoration: Do homebuyers have preferences for quality habitat?," Ecological Economics, Elsevier, vol. 68(5), pages 1465-1475, March.
    12. 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.
    13. Ekaterina Chernobai & Michael Reibel & Michael Carney, 2011. "Nonlinear Spatial and Temporal Effects of Highway Construction on House Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 42(3), pages 348-370, April.
    14. 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 and Oxford Review of Economic Policy Limited, vol. 24(1), pages 99-119, spring.
    15. John Glen & Joseph G. Nellis, 2010. "“The Price You Pay”: The Impact of State-Funded Secondary School Performance on Residential Property Values in England," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 57(4), pages 405-428, December.
    16. Cormac O'Dea & Ian Preston, 2012. "The distributional impact of public spending in the UK," IFS Working Papers W12/06, Institute for Fiscal Studies.
    17. Sylvia Y He, 2017. "A hierarchical estimation of school quality capitalisation in house prices in Orange County, California," Urban Studies, Urban Studies Journal Limited, vol. 54(14), pages 3337-3359, November.
    18. Willem R. Boterman, 2013. "Dealing with Diversity: Middle-class Family Households and the Issue of ‘Black’ and ‘White’ Schools in Amsterdam," Urban Studies, Urban Studies Journal Limited, vol. 50(6), pages 1130-1147, May.
    19. Simon Burgess & Estelle Cantillon & Mariagrazia Cavallo & Ellen Greaves & Min Zhang, 2023. "School admissions in England: The rules schools choose on which pupils to admit," ULB Institutional Repository 2013/356676, ULB -- Universite Libre de Bruxelles.
    20. Erasmo Giambona & Rafael P. Ribas, 2023. "Unveiling the Price of Obscenity: Evidence From Closing Prostitution Windows in Amsterdam," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(3), pages 677-705, June.

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