IDEAS home Printed from https://ideas.repec.org/a/eee/labeco/v18y2011i6p723-729.html
   My bibliography  Save this article

Houses and schools: Valuation of school quality through the housing market

Author

Listed:
  • Machin, Stephen

Abstract

This paper offers a critical appraisal of the now sizable empirical literature that values school quality and performance through housing valuations. This literature consistently finds housing valuations to be significantly higher in places where measured school quality is higher, implying a strong parental willingness to pay to get their children educated in better performing schools. This conclusion emerges from studies undertaken in a number of countries, using a variety of identification strategies, and at different parts of the education sequence that children follow.

Suggested Citation

  • Machin, Stephen, 2011. "Houses and schools: Valuation of school quality through the housing market," Labour Economics, Elsevier, vol. 18(6), pages 723-729.
  • Handle: RePEc:eee:labeco:v:18:y:2011:i:6:p:723-729
    DOI: 10.1016/j.labeco.2011.05.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0927537111000601
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gibbons, Steve & Machin, Stephen, 2003. "Valuing English primary schools," Journal of Urban Economics, Elsevier, vol. 53(2), pages 197-219, March.
    2. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    3. 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.
    4. Nechyba, Thomas, 2003. "School finance, spatial income segregation, and the nature of communities," Journal of Urban Economics, Elsevier, vol. 54(1), pages 61-88, July.
    5. Francis Kramarz & Stephen Machin & Amine Ouazad, 2008. "What Makes a Test Score ? The Respective Contributions of Pupils, Schools and Peers in Achievement in English Primary Education," Working Papers 2008-21, Center for Research in Economics and Statistics.
    6. David Brasington & Donald R. Haurin, 2006. "Educational Outcomes and House Values: A Test of the value added Approach," Journal of Regional Science, Wiley Blackwell, vol. 46(2), pages 245-268.
    7. Ivar Ekeland & James J. Heckman & Lars Nesheim, 2004. "Identification and Estimation of Hedonic Models," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 60-109, February.
    8. Stephen J. Redding & Daniel M. Sturm, 2008. "The Costs of Remoteness: Evidence from German Division and Reunification," American Economic Review, American Economic Association, vol. 98(5), pages 1766-1797, December.
    9. Victor Lavy & M. Daniele Paserman & Analia Schlosser, 2008. "Inside the Black of Box of Ability Peer Effects: Evidence from Variation in the Proportion of Low Achievers in the Classroom," NBER Working Papers 14415, National Bureau of Economic Research, Inc.
    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. Clapp, John M. & Nanda, Anupam & Ross, Stephen L., 2008. "Which school attributes matter? The influence of school district performance and demographic composition on property values," Journal of Urban Economics, Elsevier, vol. 63(2), pages 451-466, March.
    12. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, August.
    13. Ian Davidoff & Andrew Leigh, 2008. "How Much do Public Schools Really Cost? Estimating the Relationship between House Prices and School Quality," The Economic Record, The Economic Society of Australia, vol. 84(265), pages 193-206, June.
    14. Stephanie Riegg Cellini & Fernando Ferreira & Jesse Rothstein, 2008. "The Value of School Facilities: Evidence from a Dynamic Regression Discontinuity Design," Working Papers 1104, Princeton University, Woodrow Wilson School of Public and International Affairs, Education Research Section..
    15. David N. Figlio & Maurice E. Lucas, 2004. "What's in a Grade? School Report Cards and the Housing Market," American Economic Review, American Economic Association, vol. 94(3), pages 591-604, June.
    16. 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, vol. 24(1), pages 99-119, spring.
    17. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    18. Sheppard, Stephen, 1999. "Hedonic analysis of housing markets," Handbook of Regional and Urban Economics,in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 41, pages 1595-1635 Elsevier.
    19. 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.
    20. 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 215-232, June.
    21. Dennis N. Epple & Richard Romano, 2003. "Neighborhood Schools, Choice, and the Distribution of Educational Benefits," NBER Chapters,in: The Economics of School Choice, pages 227-286 National Bureau of Economic Research, Inc.
    22. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
    23. Steve Gibbons & Shqiponja Telhaj, 2008. "Peers and Achievement in England's Secondary Schools," SERC Discussion Papers 0001, Spatial Economics Research Centre, LSE.
    24. Thomas J. Kane & Stephanie K. Riegg & Douglas O. Staiger, 2006. "School Quality, Neighborhoods, and Housing Prices," American Law and Economics Review, Oxford University Press, vol. 8(2), pages 183-212.
    25. Helen Tauchen & Ann Dryden Witte, 2001. "Estimating Hedonic Models: Implications of the Theory," NBER Technical Working Papers 0271, National Bureau of Economic Research, Inc.
    26. Thomas J. Holmes, 1998. "The Effect of State Policies on the Location of Manufacturing: Evidence from State Borders," Journal of Political Economy, University of Chicago Press, vol. 106(4), pages 667-705, August.
    27. Gibbons, Stephen & Silva, Olmo, 2011. "School quality, child wellbeing and parents' satisfaction," Economics of Education Review, Elsevier, vol. 30(2), pages 312-331, April.
    28. Cushing, Brian J., 1984. "Capitalization of interjurisdictional fiscal differentials: An alternative approach," Journal of Urban Economics, Elsevier, vol. 15(3), pages 317-326, May.
    29. Thomas J. Nechyba, 2003. "Introducing School Choice into Multidistrict Public School Systems," NBER Chapters,in: The Economics of School Choice, pages 145-194 National Bureau of Economic Research, Inc.
    30. repec:dau:papers:123456789/6486 is not listed on IDEAS
    31. Patrick Bayer & Robert McMillan, 2005. "Choice and Competition in Local Education Markets," NBER Working Papers 11802, National Bureau of Economic Research, Inc.
    32. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Puhani, Patrick, 2015. "Do Boys Benefit from Male Teachers in Elementary School? Evidence from Administrative Panel Data," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113167, Verein für Socialpolitik / German Economic Association.
    2. Michele Raitano & Francesco Vona, 2015. "Measuring the link between intergenerational occupational mobility and earnings: evidence from eight European countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(1), pages 83-102, March.
    3. Baron, Aneil & Zhang, Wendong & Irwin, Elena, 2016. "Estimating the Capitalization Effects of Harmful Algal Bloom Incidence, Intensity and Duration? A Repeated Sales Model of Lake Erie Lakefront Property Values," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236589, Agricultural and Applied Economics Association.
    4. Schwartz, Amy Ellen & Voicu, Ioan & Horn, Keren Mertens, 2014. "Do choice schools break the link between public schools and property values? Evidence from house prices in New York City," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 1-10.
    5. Brunes, Fredrik & Hermansson, Cecilia & Song, Han-Suck & Wilhelmsson, Mats, 2016. "NIMBYs for the rich and YIMBYs for the poor: Analyzing the property price effects of infill development," Working Paper Series 16/2, Royal Institute of Technology, Department of Real Estate and Construction Management & Centre for Banking and Finance (cefin).
    6. Gibbons, Stephen & Machin, Stephen & Silva, Olmo, 2013. "Valuing school quality using boundary discontinuity," LSE Research Online Documents on Economics 45246, London School of Economics and Political Science, LSE Library.
    7. Gibbons, Stephen & Machin, Stephen & Silva, Olmo, 2013. "Valuing school quality using boundary discontinuities," Journal of Urban Economics, Elsevier, vol. 75(C), pages 15-28.
    8. Machin, Stephen, 2014. "Developments in economics of education research," Labour Economics, Elsevier, vol. 30(C), pages 13-19.
    9. 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.
    10. 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.
    11. Mathilde Poulhes, 2017. "From Latin Quarter to Montmartre Investigating Parisian Real-Estate Prices," Working Papers 2017-13, Center for Research in Economics and Statistics.
    12. Agarwal, Sumit & Rengarajan, Satyanarain & Sing, Tien Foo & Yang, Yang, 2016. "School allocation rules and housing prices: A quasi-experiment with school relocation events in Singapore," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 42-56.
    13. repec:mab:wpaper:23 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:labeco:v:18:y:2011:i:6:p:723-729. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/labeco .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.