Paying for Primary Schools: Admission Constraints, School Popularity or Congestion?

16 Pages Posted: 8 May 2006

See all articles by Stephen Gibbons

Stephen Gibbons

London School of Economics & Political Science (LSE) - Department of Geography and Environment

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

Abstract

School quality is capitalised in house prices if access to schools is rationed by residential location. We generate empirical predictions from three different theoretical approaches linking house prices to school performance, distance to school and capacity. These are respectively based upon admission constraints, school popularity and congestion effects. We find that test-score-based school performance significantly increases property prices, but only the best one in ten schools generate higher than average prices close by, and that prices are higher close to popular, over-capacity schools. We conclude that the empirical evidence is more in line with the school popularity model.

Suggested Citation

Gibbons, Stephen and Machin, Stephen J., Paying for Primary Schools: Admission Constraints, School Popularity or Congestion?. Economic Journal, Vol. 116, No. 510, pp. C77-C92, March 2006, Available at SSRN: https://ssrn.com/abstract=887620 or http://dx.doi.org/10.1111/j.1468-0297.2006.01077.x

Stephen Gibbons (Contact Author)

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

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HOME PAGE: http://www.lse.ac.uk/people/s.gibbons@lse.ac.uk/

Stephen J. Machin

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

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