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Private school, off-campus academic class and public school district housing premium: Evidence from a natural experiment in Hangzhou, China

Author

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  • Feng, Han
  • Chen, Haimin
  • Shi, Ke

Abstract

Private schools and off-campus academic classes (so called “shadow education”) may affect housing price premiums in high-quality public school districts by offering alternative educational resources. This paper leverages China's recent compulsory education reform—which restricted private school admissions and curtailed shadow education—as a natural experiment to test this hypothesis. Using transaction data from Hangzhou, we find that the reform induced a significant increase in housing prices within high-quality school districts relative to comparable ordinary school district properties. We reveal this effect operates through two distinct channels: restrictions on private schools increased the school district premium, while limitations on off-campus academic classes partially offset this increase. Our findings contribute to a greater understanding of how market-based alternatives to public education influence housing market dynamics.

Suggested Citation

  • Feng, Han & Chen, Haimin & Shi, Ke, 2025. "Private school, off-campus academic class and public school district housing premium: Evidence from a natural experiment in Hangzhou, China," China Economic Review, Elsevier, vol. 94(PA).
    • Handle: RePEc:eee:chieco:v:94:y:2025:i:pa:s1043951x25001658
    DOI: 10.1016/j.chieco.2025.102507
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets

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