Best Education Money Can Buy? Capitalization of School Quality in Finland
Oskari Harjunen,
Mika Kortelainen and
Tuukka Saarimaa
CESifo Economic Studies, 2018, vol. 64, issue 2, 150-175
Abstract:
By international comparison, Finnish pupil achievement is high and school achievement differences small. The Finnish education system is unusual also because there are no national testing programmes, and information on school quality measures is not publicly disclosed. Is school quality capitalized into house prices in this environment? Using a boundary discontinuity research design and data from Helsinki, we find that it is: 1 standard deviation increase in average test scores increases prices on average by 3%, which is comparable to findings from the UK and the USA. We argue that this surprisingly large effect is at least partly explained by the inelasticity of housing supply, as we use data from a densely populated urban area. We also show that the effect depends on local land supply conditions within the city and is highest in areas with inelastic supply. Furthermore, the price premium seems to be related to pupils’ socio-economic background rather than school effectiveness.
Keywords: boundary discontinuity; house prices; school quality; spatial differencing (search for similar items in EconPapers)
JEL-codes: C21 H75 I20 R21 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)
Downloads: (external link)
http://hdl.handle.net/10.1093/cesifo/ifx025 (application/pdf)
Access to full text is restricted to subscribers.
Related works:
Working Paper: Best Education Money Can Buy? Capitalization of School Quality in Finland (2014) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:oup:cesifo:v:64:y:2018:i:2:p:150-175.
Ordering information: This journal article can be ordered from
https://academic.oup.com/journals
Access Statistics for this article
CESifo Economic Studies is currently edited by Panu Poutvaara
More articles in CESifo Economic Studies from CESifo Group Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().