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Winning at the Starting Line: Key School Education Premium and Housing Prices in Beijing

Department of Finance    2017-12-25

Winning at the Starting Line: Key School Education Premium and Housing Prices in Beijing

Speaker: Zhao Bo, Assistant Professor from China Center for Economic Research, National School of Development, Peking University

Host: Xu Zhiwei, Associate Professor from Department of Finance, ACEM

Time: Dec 29, 2017, Friday, 13:30-15:00

Venue: S202 Xinshangyuan Building


Introduction: 

Using housing transaction data from the second-hand housing market in Beijing, this paper infers the value parents place on school quality by comparing the key-school apartments with the non-key-school apartments. In order to address the problems such as the omitted variables in the hedonic regression and the endogenous school attendance boundary, we apply the BDD (boundary discontinuity design) method and construct theoretical school attendance boundary based on Thiessen polygons as the instrument variable for the actual school attendance boundary. We find that the housing price of the key-schools in Beijing is on average 25 percent higher than the housing price of the non-key schools during 2013 to 2016. In contrast, the rental price difference between the key and non-key school housing is only 14 percent due to the unequal rights to enter primary schools. We also use the school zoning reform at 2017 as a natural experiment to test our findings.  


Speaker Introduction: 

Zhao Bo is Assistant Professor at China Center for Economic Research, National School of Development, Peking University. His main research areas include Quantitative Macroeconomics, Labor Economics, Asset Pricing and Urban Economics. He received his PhD in Economics from University of Oslo in 2012, he also holds an MPhil in Economics from University of Oslo, and an MA in Economics and a BS in Mathematics from Fudan University. He has been an Assistant Professor at the National School of Development, Peking University since 2012 and was a visiting scholar to the Reserve Bank of Minneapolis from 2009-2011. 



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