Premium Effect Of Elite Schools And Their Branches

With the rapid development of Chinese real estate market and the improvement of residents’ income level,housing-buyers pay more and more attention to the living environment and the public services quality of house.The quality of schools around housing has become an important factor in housing purchase decision-making.China began to strictly implement the policy of "Nearby Enrollment" in primary and secondary schools across the country in 2005.After that,"School Choice by Using Purchasing Home" has become the main way for Chinese parents to seek high-quality compulsory education for their children,which makes schools with better education quality bring huge value-added to the housing in school districts.The phenomenon of“School District Housing" has become a hot issue of common concern among the public,the government and the scholars.Western academia has been studying the premium effect of school education quality on school district housing for a long time.Many scholars have done a lot of empirical researches on the impact of education quality on housing prices based on Tiebout theory and Hedonic Price Model framework.Although the empirical results from different countries show that the quality of school education has a significant positive impact on the housing prices of school districts,the level of the premium effect is quite different among different countries and institutional systems.At the same time.more and more economists find out that the traditional regression method will lead to serious endogenous bias in estimating the premium effect of school education quality.To solve this problem,researchers have to adopt more advanced resecarch design,such as natural experiment and quasi-experimental methods.For a long time,Nanjing’s housing price has always been in the top ten cities in China.There are abundant compulsory education resources in Nanjing,but the quality of school education varies greatly among schools,so that "School Choice by Using Purchasing Home" is quite serious.In recent years,Nanjing Municipal Government has expanded the coverage of high-quality educational resources to promote the balanced development of education by encouraging elite schools to run branch schools.This study collects the housing price data of 1849 residential communities in eight municipal districts of Nanjing in 2017.Using the boundary matching diiference method dcveloped on boundary fixed effect method in Black(1999),this paper takes the School boundary as the spatial discontinuity to accurately estimate the premium of elite primary schools and their branches.This study found that parents still have strong willingness to bid for high quality education resources,and the premium of elite primary schools and their branches on school district housing are 1 9.7%and 3.6%respectively.Every percentage point increase in the enrollment rate of Nanjing Foreign Language School that is elite middle school in Nanjing will increase the housing price of the corresponding school districts by 4.0%.School District Housing premium can be decomposed into enrollment effect and prestige effect.That is to say,the high premium of elite schools comes from the excellent performance of the enrollment rate of elite schools and the parents’ trust in the long-term prestige of elite schools.Parents pay more attention to the present quality and the performance of the enrollment rate of branch schools.Based on results above,current "Nearby Enrollment" policy is still the main driver for the school district housing price blooming,whose effects could be not be easily offset by relevant policy such as "Elite School Running Branches".We suggest that the governance of "school District housing" could undergo a long-term period,and the key to the success of the current reform lies not in simply increasing the number of elite schools’ branches and expanding the "nominal" coverage rate of high-quality educational resources,but in improving the teacher quality and major management of weak schools through certain policies and reducing the disparity in the quality between elite schools and their branches.