Valuing School Quality Via a School Choice Reform

22 Pages Posted: 19 Jan 2016

See all articles by Stephen J. Machin

Stephen J. Machin

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); London School of Economics & Political Science (LSE) - Department of Economics

Kjell G. Salvanes

Norwegian School of Economics (NHH) - Department of Economics; IZA Institute of Labor Economics

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Date Written: January 2016

Abstract

Among policymakers, educators, and economists, there remains a strong debate on the extent to which good schools matter. In this paper, we estimate school quality valuations based upon house prices, by considering a policy reform regarding pupils' choices to attend high school. We exploit a change in school choice that occurred in Oslo county in 1997, where school authorities altered policy from one based on catchment zones to an open enrollment policy that allowed pupils to apply to any high school. Our estimates show that parents substantially value better performing schools because the sensitivity of housing valuations to school performance falls significantly (by over 50 percent) following the school choice reform that made the move to open enrollment.

Keywords: House prices, school choice reform, school quality

JEL Classification: C21, I20, R21

Suggested Citation

Machin, Stephen J. and Salvanes, Kjell G., Valuing School Quality Via a School Choice Reform (January 2016). The Scandinavian Journal of Economics, Vol. 118, Issue 1, pp. 3-24, 2016. Available at SSRN: https://ssrn.com/abstract=2717202 or http://dx.doi.org/10.1111/sjoe.12133

Stephen J. Machin (Contact Author)

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Kjell G. Salvanes

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway
+47 5 595 9315 (Phone)
+47 5 595 9543 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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