Educational Differential Land Rent of School Distinct Housing and the Effect of Unequal Educational Opportunities

Abstract

School district housing plays an important role in the assignment of elementary education resources in China. In the past 20 years, the price of school district housing has risen much higher than that of ordinary housing, which has aroused a great concern of the society. It is not only a theoretical problem, but also a practical problem needs to be solved. The existing research mainly focuses on the empirical analysis of measuring the premium of school district housing, while the theoretical research is relatively less, and the effect of school district housing has not been paid enough attention.This paper addresses to the above problems. In our theoretical analysis, based on the perspective of political economy, we introduce the theory of differential land rent, put forward the concept of “educational differential land rent”. We find out that the generation of school district housing premium follows this path: The imbalanced government investment in education causes the difference among schools; when school enrollment is combined with property rights, the excess profits of human capital in the future turns into the educational differential land rent; the rent affects the land price, and ultimately leads to the premium of school district housing. The effect of school district housing premium is reflected in: The family background affects the decision-making of the payment of the educational differential land rent, which leads to unequal educational opportunities.In our mathematical model, we find that the core factors affecting the payment of educational differential land rent are the family wealth and the expected return of education. When the government inclines educational investment to key schools, the educational differential land rent will increase, the competition on school district housing purchase will intensify, and the income inequality among the next generation will be worse.In our empirical study, we use data from China Family Panel Studies（CFPS） to measure the educational differential land rent. We find that the key school district housing has a higher educational differential land rent, and this rent has a significant positive impact on the school district housing price; family wealth has a significant positive impact on the payment of educational differential land rent. Therefore, the government should incline educational investment to ordinary schools, and expand the supply of education, so as to promote more equitable educational opportunities.The academic value of this paper could be concluded in three aspects: First, it studies the problem of school district housing in China from the perspective of political economy, analyzes the causes of the school district housing premium, and develops the theory of differential land rent. Second, it makes a systematic study on the problem of school district housing, and finds that the family background will lead to unequal educational opportunities through the path of educational differential land rent. Third, based on the micro database, we introduce family characteristics into the regression model, and calculate the educational differential land rent.