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The Value of Secondary School Quality

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  • Leslie Rosenthal

Abstract

Improving the quality of state-funded secondary school education has become a major policy aim in the UK. However, without a valuation of the social benefits derived from public provision of educational services, the rational evaluation of policy to this end is difficult. Utilizing the argument that dwellings near better schools command a price premium, this paper presents results from an empirical exercise aimed at providing such a social valuation of increased school quality. Using a large set of data for England, and an instrumental variable approach, results indicate an elasticity of dwelling purchase price with respect to exam performance by schools at around +0.05. One implication is that society would value a general increase of five percentage points in exam performance by about 450 million pounds per annum. Copyright 2003 Blackwell Publishing Ltd.

Suggested Citation

  • Leslie Rosenthal, 2003. "The Value of Secondary School Quality," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(3), pages 329-355, July.
  • Handle: RePEc:bla:obuest:v:65:y:2003:i:3:p:329-355
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    1. repec:ris:apltrx:0323 is not listed on IDEAS
    2. 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, Department of Quantitative Social Science - UCL Institute of Education, University College London.
    3. 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, Department of Quantitative Social Science - UCL Institute of Education, University College London.
    4. Foreman-Peck, James & Foreman-Peck, Lorraine, 2006. "Should schools be smaller? The size-performance relationship for Welsh schools," Economics of Education Review, Elsevier, vol. 25(2), pages 157-171, April.
    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. 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.
    7. Christian A. L. Hilber, 2017. "The Economic Implications of House Price Capitalization: A Synthesis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 45(2), pages 301-339, April.
    8. Machin, Stephen & Wyness, Gill & McNally, Sandra, 2013. "Education in a devolved Scotland: a quantitative analysis," LSE Research Online Documents on Economics 57971, London School of Economics and Political Science, LSE Library.
    9. Stephen Machin & Sandra McNally, 2012. "The Evaluation of English Education Policies," National Institute Economic Review, National Institute of Economic and Social Research, vol. 219(1), pages 15-25, January.
    10. Yadavalli, Anita P. & Florax, Raymond J.G.M., 2013. "The Effect of School Quality on House Prices: A Meta-Regression Analysis," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151291, Agricultural and Applied Economics Association.
    11. 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.
    12. Machin, Stephen, 2011. "Houses and schools: Valuation of school quality through the housing market," Labour Economics, Elsevier, vol. 18(6), pages 723-729.
    13. repec:eee:chieco:v:49:y:2018:i:c:p:229-240 is not listed on IDEAS
    14. Hilber, Christian A. L., 2011. "The economics implications of house price capitalization a survey of an emerging literature," LSE Research Online Documents on Economics 58596, London School of Economics and Political Science, LSE Library.
    15. Cormac O'Dea & Ian Preston, 2012. "The distributional impact of public spending in the UK," IFS Working Papers W12/06, Institute for Fiscal Studies.
    16. Siqi Zheng & Wanyang Hu & Rui Wang, 2016. "How Much Is a Good School Worth in Beijing? Identifying Price Premium with Paired Resale and Rental Data," The Journal of Real Estate Finance and Economics, Springer, vol. 53(2), pages 184-199, August.

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