Capitalizing Performance of 'Free' Schools and the Difficulty of Reforming School Attendance Boundaries

John Gibson and Geua Boe-Gibson

Working Papers in Economics from University of Waikato

Abstract: School attendance boundaries are a contentious issue in New Zealand, and have been relaxed and re-imposed depending upon political sentiment. Critics contend that a supposedly egalitarian state school system becomes one of selection by mortgage, with the value of ‘free’ schools capitalized into property prices. Attendance boundaries restrict the schooling opportunity set facing a student, who typically is unable to study at nearby high-performing schools if they live outside their boundary. We relate schooling opportunity sets to sales prices of over 8000 houses in Christchurch, controlling for dwelling attributes, neighborhood characteristics and geographic accessibility to a wide range of services. Our model explains over three-quarters of the variation in prices and we use this model to predict property prices if there were no attendance boundaries. Abolishing boundaries expands most schooling opportunity sets and predicted house prices generally rise. But prices would fall in some higher income neighborhoods with highly educated residents, who are likely to oppose reform of school attendance boundaries.

Keywords: attendance boundaries; house prices; school quality (search for similar items in EconPapers)
JEL-codes: C21 I20 R21 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2014-07-03
New Economics Papers: this item is included in nep-edu and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:wai:econwp:14/08

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