The impact of geographically defined school zones on house prices in New Zealand

Abstract

PurposeThe purpose of this paper is to explore and quantify the impact of geographically defined school zones on house prices in New Zealand.Design/methodology/approachThis paper develops a series of hedonic pricing models to analyse 10,000 house sales transactions over a 21‐year period within a compact group of inner Auckland suburbs, which represents the epicentre of the school zoning debate in New Zealand. The study diverts from past research, which mainly focuses on school quality measures such as standardised test scores, and instead analyses the comprehensive price impacts of access to popular state schools. Its unique approach employs a geographic information system to divide the study area into effective school zones and then further subdivide into suburbs, thus offering a vital indicator of internal validity.FindingsThe study's findings indicate that the influence of school zoning on house prices is not uniform and the variation in price effects is largely a function of the uncertainty of future zone boundary definitions. Although some “in‐zone” suburbs have enjoyed accelerated house price growth following the reintroduction of zoning in 2000, peripheral suburbs’ price premiums have diminished.Originality/valueIn contrast to standard hedonic studies on school quality, this paper offers an innovative approach that integrates geography to solve what is essentially a spatial economic problem.