The effect of a multi-school zoning policy on the capitalization of educational resources: A quasi-natural experiment in Beijing

Abstract

The problem of capitalizing high-quality education resources into real estate prices has been widely analyzed. This paper discusses the influence of school district policy—the “multi-school zoning (MSZ)” policy—on district housing prices in Beijing. The MSZ policy randomly assigns students to key primary schools (A public primary school with a long history and outstanding teaching quality), indirectly affecting residents' house-buying behavior. Using data from 60,663 housing transactions, we evaluated the effect of the policy through regression discontinuity (RD) design methodology. The results showed that: (1) overall house prices decreased by 8.2 % in Xicheng, and by 10.1 % in Haidian. The more significant decrease in Haidian is likely because of the large differences in educational resources in that area. (2) Housing prices in key vs. high-quality school districts in Xicheng decreased by 10.7 % and 10.6 %, respectively, likely because of the superior quality and balanced educational resources in that region. The effect of the MSZ policy on housing prices in key and high-quality school districts is similar. (3) Housing prices in different school districts in Haidian decreased by 12.5 % and 6.8 %, respectively. The unique merit-based enrollment model of Haidian undermines the random allocation aspect of the MSZ policy, thereby diminishing its inhibitory effect on housing prices in high - quality school districts. These findings shed light on the MSZ's role in preventing the capitalization of educational resources, which varies among school districts. The results may serve as a reference for policy makers in subsequent implementations.