The enrolment reform of schools and housing price: Empirical evidence from Shanghai, China

Abstract

Based on the housing transaction data from Shanghai of China, the Difference-in-Differences (DID) model is taken to evaluate the synchronous enrolment policy which aim to equalize access to public and private schools. The results indicate that the policy increased the housing prices of high-quality public primary school districts by an average of 1.6%. Moreover, the policy has different impacts on housing premium in elite school districts at different levels. The estimated values of the housing premium in top-, second- and third-class key primary schools district were 6.7%, 2.5% and −1.2%, respectively. The policy impacted mainly significantly on small-sized houses. For the houses smaller than 40m2 and 40–60m2, the housing premiums were 2.1% and 1.8% respectively. To eliminate the uncertainty of participating in public school enrolment after the failure of enrolment in private schools, many families gave up the rights to choose private schools and bought houses in high-quality public-school districts with lower enrolment risk. The policy inhibited the families’ zeal for choosing high-quality private schools, but intensified the competition of “school selection by housing” for high-quality public schools. In order to bridge the gap between public schools and private schools, systematic policy adjustments are suggested including “double reduction policy”, “muti-schools district policy”, etc.