When do Better Schools Raise Housing Prices? Evidence from Paris Public and Private Schools

Gabrielle Fack and Julien Grenet

CEE Discussion Papers from Centre for the Economics of Education, LSE

Abstract: In this paper, we investigate how housing prices react to the quality of education offered by neighbouring public and private schools. The organization of secondary schooling in the city of Paris, which combines residence-based-assignment to public schools with a well-developed and almost entirely publicly funded private school system, offers a valuable empirical context for analyzing how private schools affect the capitalization of public school performance in housing prices. Using comprehensive data on both schools and real estate transact ions over the period 1997-2004, we develop a matching framework to carefully compare sales across school attendance boundaries. We find that a standard deviation increase in public school performance raises housing prices by 1.4 to 2.4%. Moreover, we show that the capitalization of public school performance in the price of real estate shrinks as the availability of private schools increases in the neighbourhood. Our results confirm the predictions of general equilibrium models of school choice that private schools, by providing an advantageous outside option to parents, tend to mitigate the impact of public school performance on housing prices.

Keywords: School attendance zones; private schools; housing markets; residential segregation (search for similar items in EconPapers)
JEL-codes: H41 I21 I28 R21 (search for similar items in EconPapers)
Date: 2010-10
New Economics Papers: this item is included in nep-edu, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (167)

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https://cep.lse.ac.uk/pubs/download/cee/ceedp119.pdf (application/pdf)

Related works:
Journal Article: When do better schools raise housing prices? Evidence from Paris public and private schools (2010)
Working Paper: When do better schools raise housing prices? Evidence from Paris public and private schools (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:ceedps:0119

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