A study on the benefit incidence of a place-based education fee reduction program: Evidence from a local housing market in China

Yugang Tang, Meng-Wei Chen and Hehe Zhang

Regional Science and Urban Economics, 2024, vol. 106, issue C

Abstract: This paper studies an Education Fee Reduction and Exemption Program for preschool childcare in Jinan, China, to explore the benefit incidence among different stakeholders by observing how housing prices and rents change in response to this program and by employing a method of difference-in-differences combined with boundary discontinuity. The empirical findings indicate that the housing prices in the experimental area rose by 5–7 percent while the rents rose by 10–13 percent due to the capitalization effects of this equalization program. Falsification tests are conducted using artificial boundaries and fake policy implementation dates. A back-of-the-envelope welfare analysis demonstrates that a considerable portion of the program's benefits is offset by house price increases for new home buyers and rent increases for tenants, with significant distributional implications for different stakeholders.

Keywords: Equal rights for tenants and homeowners; Capitalization effect; Benefit incidence; Income distribution (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:106:y:2024:i:c:s0166046224000346

DOI: 10.1016/j.regsciurbeco.2024.104010

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