The Values of Good School from the Perspective of Rent Yields Discounts: Empirical Evidence from the Second-Hand Housing Market in Shanghai
ZHANG Muyang, CHEN Jie, SHI Wei
China Public Finance Institute/School of Public Economics and Administration/Institute for Advanced Research, and Institute of Real Estate Research, Shanghai University of Finance and Economics; Pudong Research Institute, Shanghai Finance University
Abstract:
Real estate property price has surged dramatically in school districts with high-quality primary schools in major Chinese cities, while rents do not see much increase. This is due to the policy that in most cases only owners have the privilege to access local public schools in China. In this paper, we use the discounts of rent yields as a measurement willingness-to-pay to high-quality primary public school using micro data in Shanghai. We find that the rent-to-sale ratio is about 5 percent lower on average in the neighborhoods in good-school districts, compared to those in ordinary school districts. The gap can be as large as 19 percent in apartments with smaller square footage and is sensitive to changes of policies regarding public school enrollment. We suggest that if the quality of primary schools cannot be fully equalized in the near future, allowing tenants to enjoy the same privilege as owners can not only significantly cut the rent-to-sale ratio discount of the good-school-district apartments, but also improve intergenerational mobility in education attainment, and improve the efficiency of capital uses.
张牧扬, 陈杰, 石薇. 租金率折价视角的学区价值测度——来自上海二手房市场的证据[J]. 金融研究, 2016, 432(6): 97-111.
ZHANG Muyang, CHEN Jie, SHI Wei. The Values of Good School from the Perspective of Rent Yields Discounts: Empirical Evidence from the Second-Hand Housing Market in Shanghai. Journal of Financial Research, 2016, 432(6): 97-111.
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