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School allocation rules and housing prices: A quasi-experiment with school relocation events in Singapore

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  • Agarwal, Sumit
  • Rengarajan, Satyanarain
  • Sing, Tien Foo
  • Yang, Yang

Abstract

This study uses a unique distance-based school allocation priority rule in Singapore as an identification to test school relocation effects on housing prices in the school zone. Using housing samples during the period from 1999 to 2009, our main results show that private housing prices within 1-km zone and in 1-km to 2-km zone from the old school zone decline by 2.9% and 6.0%, respectively, 6months before the school relocation events. Larger price declines of 5.5% and 6.9% are found for houses located in 1km and 1km to 2km school zones 12months before the school relocations. In the public housing market, we find that school relocations cause significant housing price declines of between 0.7% and 1.4% for households living within the 1-km school zone. The school relocation treatment effects are amplified by the school popularity ranking. The prioritization in school allocation accorded to houses within 1-km school zone has significant economic value in the private housing market.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:regeco:v:58:y:2016:i:c:p:42-56
    DOI: 10.1016/j.regsciurbeco.2016.02.003
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    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • I2 - Health, Education, and Welfare - - Education
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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