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Valuing school quality using boundary discontinuities

Gibbons, Stephen ORCID: 0000-0002-2871-8562, Machin, Stephen and Silva, Olmo (2009) Valuing school quality using boundary discontinuities. SERC discussion papers (18). Spatial Economics Research Centre, London, UK.

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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%.

Item Type: Monograph (Discussion Paper)
Official URL:
Additional Information: © 2009 The Authors
Divisions: Geography & Environment
Spatial Economics Research Centre
Centre for Economic Performance
Subjects: G Geography. Anthropology. Recreation > G Geography (General)
L Education > L Education (General)
JEL classification: C - Mathematical and Quantitative Methods > C2 - Econometric Methods: Single Equation Models; Single Variables > C21 - Cross-Sectional Models; Spatial Models; Treatment Effect Models
I - Health, Education, and Welfare > I2 - Education > I20 - General
H - Public Economics > H7 - State and Local Government; Intergovernmental Relations > H75 - State and Local Government: Health, Education, and Welfare
R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R21 - Housing Demand
Date Deposited: 15 Dec 2010 15:58
Last Modified: 16 May 2024 11:50

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