School Allocation Rules and Housing Prices : A Quasi-Experiment with School Relocation Events in Singapore

This study uses a unique distance-based priority school allocation rule in Singapore as an identification to test school relocation effects on housing prices in the school zone. Using housing samples during the period from 1999 to 2009, our main results show that private housing prices within 1-km zone and in 1-km to 2-km zone from the old school zone decline by 2.9% and 6.0%, respectively, 6 months before the school relocation events. Larger price declines of 5.5% and 6.9% for houses located in 1-km and 1-km to 2-km from the school locations are found 12 months before the school relocations. In the public housing market, we also find that school relocations cause significant housing price declines of between 0.7% and 1.4% for households living within the 1-km school zone. The school relocation treatment effects are amplified by the school popularity ranking. The prioritization in school allocation accorded to houses within 1-km school zone has significant economic value in the private housing market