Unintended effects of private tutoring restrictions on property prices in high-quality school districts: Evidence from a metropolitan city of China

Growing concerns over private tutoring exacerbating educational disparities and disrupting mainstream schooling have led some countries to regulate this sector. China’s 2021 “Double Reduction” policy which imposes strict regulations on private tutoring institutions, provides a critical opportunity to examine how families adapt when supplementary education options are restricted. Guided by literature on household education decisions, we investigate whether such restrictions prompt parents to reallocate resources toward securing access to high-quality schools, as reflected in rising housing prices in desirable school districts. Using a boundary discontinuity regression design applied to geospatial and statistical data from a major Chinese metropolitan city, we find that the policy significantly increased property values in high-quality school districts. These effects were more pronounced during the policy implementation stage compared to its agenda-setting period. Additionally, the impacts are stronger for residences near schools with good public reputations rather than those near officially certified high-quality institutions. Our results suggest that while the policy curtails parental capacity to leverage private tutoring for competitive advantage, it inadvertently redirected their efforts toward alternative pathways tied to structural inequities in school access. This redirection underscores the limitations of the private tutoring restriction approach. Without addressing structural and institutional drivers of education competition previously noted in the literature, regulations risk displacing rather than resolving the problem. Our findings highlight the necessity for comprehensive reforms to tackle the factors underlying education competition, rather than its symptoms.