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Valuing school quality using boundary discontinuities

Stephen Gibbons, Stephen Machin and Olmo Silva

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: A large body of international research shows that house prices respond to local school quality as measured by average test scores. But better test scores could signal better expected academic outputs or simply reflect higher ability intakes, and existing studies rarely differentiate between these two channels. In our research, we simultaneously estimate the response of prices to school ‘value-added’ and school composition to show more clearly what drives parental demand for schools. To achieve consistent estimates, we push to the limit the use of geographical boundary discontinuities in hedonic models by matching identical properties across admissions authority boundaries; by allowing for a variety of boundary effects and spatial trends; by re-weighting our data to only consider the transactions that are closest to education district boundaries; and by submitting the estimates to a number of potentially destructive falsification tests. Our results survive this battery of experiments and show that a one-standard deviation change in either school value-added or prior achievement raises prices by around 3%.

Keywords: house prices; school quality; boundary discontinuities (search for similar items in EconPapers)
JEL-codes: C21 H75 I20 R21 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2009-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://eprints.lse.ac.uk/30814/ Open access version. (application/pdf)

Related works:
Journal Article: Valuing school quality using boundary discontinuities (2013) Downloads
Working Paper: Valuing School Quality Using Boundary Discontinuities (2012) Downloads
Working Paper: Valuing school quality using boundary discontinuities (2012) Downloads
Working Paper: Valuing School Quality Using Boundary Discontinuities (2009) Downloads
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