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Paying for good neighbours: estimating the value of an implied educated community

Gibbons, Stephen (2003) Paying for good neighbours: estimating the value of an implied educated community. Urban Studies, 40 (4). pp. 809-833. ISSN 0042-0980

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Abstract

By definition, spillovers across households in residential communities mean that people incur costs from living in neighbourhoods where a high proportion of households suffer deprivation, regardless of their own economic circumstances. To verify the existence of intracommunity spillovers, this paper shows that home-owners in England and Wales are prepared to pay a substantial premium to avoid educationally poor neighbourhoods. An increase of 1 per cent in the proportion of higher-educated residents in a community, relative to the regional mean, increases prices by 0.24 per cent. One interpretation of this educational elasticity is that it estimates the social benefits of education in the local community. A hedonic approach is used, paying careful attention to the endogeneity of neighbourhood characteristics in a property price model.

Item Type: Article
Official URL: http://usj.sagepub.com/
Additional Information: © 2003 SAGE publications
Library of Congress subject classification: G Geography. Anthropology. Recreation > G Geography (General)
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Departments > Geography and Environment
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 14 Jul 2008 16:39
URL: http://eprints.lse.ac.uk/19296/

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