School Assignment Rule, Families’ School Choices and Educational Capitalization Effect : Evidence from an Experiment in Beijing, China

This study constructs a competitive school district housing market model, ascertains the impact of reform in public school assignment rules on families’ school choice behavior, and investigates the impact of a multi-school dicing reform conducted in Beijing’s Haidian District in April 2018. We discover that after the reform, housing prices in Haidian District drop significantly by 4.55%, thus increasing opportunities for children in middle-income families to be assigned to high-quality schools in the zone. However, there are structural differences in the impact of the reform on families’ school choice. Poor families may be squeezed out of the public schools where they could have enrolled (as the prices of houses with improved educational quality in high-quality zones increased by 1.3%). Wealthy families choose private schools to ensure high-quality educational resources, as reflected in a 6.42% increase in rents near high-quality private schools. Furthermore, Chinese families prefer to rent near schools to avoid increasing commuting costs, as shown by rents near public schools increasing by 0.58%. School assignment rule reforms in developing countries are meant to solve excessive “school choice competition”, but it is also important to consider differences in the educational preferences of families and the coordination of various educational policies