Educational Capital Premium For Housing

In recent years,China's housing market has become more a complete.Free housing market has caused significant spatial imbalances in housing prices and residential location choice has become an intermediate mechanism for residents to obtain various local public goods.As a scarce public resource,the "education capital premium" is an important part of China's housing prices under the system that students should be assigned to specific school according to the address they live in.Under the practice of China's continuous improvement of its education system,a variety of policies continue to emerge,such as restricting school choices freedom,canceling the title of “key school”,and The "synchronous enrollment of public and private schools" policy implemented in Shanghai in 2018.These policies did not really eliminate the differences in the quality of education between schools and parents' willingness to choose schools.Previous literature on public education expenditure,student achievement,and school titles used to measure the "education capital premium" of housing prices has proved that the "education capitalization" phenomenon still exists.In the case of "education capitalization",various policies that restrict school enrollment give high-income earners advantage to access to high-quality basic education resources through housing transaction.As a good policy shock,whether the "synchronous enrollment of public and private schools" policy announced in Shanghai in January 2018 has exacerbated the "education capital premium" of housing prices is discussed in this article.This article uses Yangpu District as an example to estimate the housing premium of the school district under "synchronous enrollment of public and private schools" policy.This article uses the data of second-hand housing transactions in Yangpu District,Shanghai as a research sample,and uses the public primary school ranks referenced by parents as a measure of the quality of education.This paper examines the impact of the "education capital premium" brought about by "synchronous enrollment of public and private schools" policy.The empirical research in this article finds that the policy effect will have a significant positive impact on housing price if public primary schools' education quality is equal to or higher than that of private primary schools.And a public school that has a lower educational quality than private primary schools will cause a significant negative impact on the average price of housing in its school district.On average,the average unit price of housing in the first class school district increased approximately 1,510 yuan per square meter,accounting for 2.4% of the sample's average.The average unit price of housing in the second class school district decreased approximately 744.8 yuan per square meter,accounting for 1.4% of the sample's average;the average unit price of housing in the third class school district decreased about 433.1 yuan per square meter,accounting for 0.9% of the sample's average.Over time,the impact of the policy on the price reduction of the second and third housing units has become more and more significant.In the second quarter of 2019,the average unit price of housing in the second class school district decreased by about 3032 yuan per square meter,accounting for 5.72% of the sample's average;the average unit price of housing in the third class school district decreased about 2150 yuan per square meter,accounting for 4.24% of the sample's average.Further analysis found that after excluding the heterogeneity of housing types and changes in school district,the effect of policy effects on the average unit price of housing expanded.Besides,Taxes and fees accompanying the second-hand housing transaction are also a significant factor affecting the housing price.Through the analysis,it was found that the unit price of ordinary residential housing in the first class school district increased by about 1880 yuan per square meter,which was 55.26% higher than the price change of transaction excluding the change of school district only.The decline in unit prices of ordinary residential housing in the third class has also been relatively reduced,18.41% lower than the price change of transaction excluding the change of school district only.This is because the value-added tax,personal income tax and deed tax all set lower tax rates on ordinary houses,and parents will prefer to buy low-tax housing.The reason why the "synchronous enrollment of public and private schools" policy brings such a high "education capital premium" change is that household registration restrictions and differences in education quality have forced parents to transact educational capital in housing market.As this policy further restricts school choices,parents who prefer their children to receive the best education more securely have a weaker choice preference for second and third class primary schools.Under the "synchronous enrollment of public and private schools" policy,the "education capital premium" change in house prices indicates that the real estate market has played an important role in education capital transactions.And because of the uneven quality of compulsory education in each school,education capital trading in the real estate market will last for a long time.