The Impact Of Basic Education On Residential Price In Shanghai

From2003, accompanied with the rapid expansion of China’urbanization, a mass of alien workers have continued swarming into the large and medium-sized cities, changing the size and structure of the population of cities; the housing price of China is experiencing the period of fast growing, exorbitant housing price has given a heavy burden on the low-and middle-income families. At the same time, in order to have a clearer understanding of the development of China’s property market, scholars began to focus more on a key factor of demand-population rather than the aspect of governments’land supply. Except for the self-development of population, what factor may influence the inner population composition of city any way, by which it drives the different growth of housing price among districts in a city?Under the current education policies of’forbidding selection of primary and middle schools and making the school-age children entering schools near their residence’in China, the allocation of basic educational resources is exercised by the property market. The difference in educational resources among districts pushes parents to scramble for the residence in the area with high quality of education, by which it changes the age and population of districts and finally affects the housing demand and price. Whether the housing price is influenced by basic education at present stage of China? Is the mechanism of population migration an important driving force in the realization of capitalization of education? These questions still need to be answered by empirical analyses.This paper makes a little modification with the existing Tiebout model which researches the capitalization of public service by introducing the factor of population mobility and analyzing its effects. Then this paper studies the monthly prices of commercial residential building and basic educational resources of seventeen districts in Shanghai from January of2010to December of2012, and explores the role of population movement in the capitalization of education by introducing the interaction terms between educational variables and relative population and net migration within the city respectively. The results of empirical analysis demonstrate that the difference in basic educational resource has significantly influence the housing price among districts in Shanghai and the mechanism is absolutely the free movement of residents reveled by the theory of’voting by feet’. On this basis, this paper offers the policy advices of balancing the quantity of primary and middle schools between central areas and suburban districts and the allocation of teachers between primary schools and secondary schools within the educational system, in order to promote the balanced development among districts and control the housing price in Shanghai.