 School quality and housing prices: Empirical evidence from a natural experiment in Shanghai, ChinaHao Feng and Ming Lu Journal of Housing Economics, 2013, vol. 22, issue 4, 291-307 Abstract: The endogeneity of education quality and quantity accounts for difficulties in appropriately identifying the causal relationship between education and housing prices. To determine how education quality is capitalized into housing prices, we deal with endogeneity bias by employing a natural experiment occasioned by China’s education reforms. Based on monthly panel data for 52 residential areas in Shanghai, we conducted a natural experiment based on the exogenous designation of specific high-quality schools as Experimental Model Senior High Schools (EMSHS). Our natural experiment proved useful in analyzing how new information affected housing prices in China’s developing housing market. We found evidence that housing prices included allowances for these new EMSHS designations. In general, the presence of an additional EMSHS (of the best quality) per square kilometer increases housing prices by 17.1%. If one additional, previously non-designated high school is designated as EMSHS in a residential area, housing prices will be 6.9% higher. Keywords: Education; Housing market; Capitalization; Public goods; Natural experiment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:22:y:2013:i:4:p:291-307 DOI: 10.1016/j.jhe.2013.10.003 Access Statistics for this article Journal of Housing Economics is currently edited by H. O. Pollakowski More articles in Journal of Housing Economics from Elsevier |
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