Journal
JOURNAL OF URBAN ECONOMICS
Volume 75, Issue -, Pages 15-28Publisher
ACADEMIC PRESS INC ELSEVIER SCIENCE
DOI: 10.1016/j.jue.2012.11.001
Keywords
House prices; School quality; Boundary discontinuities
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Funding
- Economic and Social Research Council [ES/H02123X/1, ES/J021342/1] Funding Source: researchfish
- ESRC [ES/J021342/1, ES/G005966/1, ES/H02123X/1] Funding Source: UKRI
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Existing research shows that house prices respond to local school quality as measured by average test scores. However, higher test scores could signal higher academic value-added or higher ability, more sought-after intakes. In our research, we show that both school value-added and student prior achievement - linked to the background of children in schools - affect households' demand for education. In order to identify these effects, we improve the boundary discontinuity regression methodology by matching identical properties across admissions authority boundaries; by allowing for boundary effects and spatial trends; by re-weighting our data towards transactions that are closest to district boundaries; by eliminating boundaries that coincide with major geographical features; and by submitting our estimates to a number of novel falsification tests. Our results survive this battery of tests and show that a one-standard deviation change in either school average value-added or prior achievement raises prices by around 3%. (C) 2012 Elsevier Inc. All rights reserved.
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