Sorting for schools: housing, education and inequality

Abstract

How do house prices affect variation in school quality and citizen satisfaction with education? In this paper, we show that the structure of socio-economic inequality produced by the housing market has dramatic effects on both citizen's preferences over education and its provision, along the lines suggested by scholars in the tradition of Tiebout. In particular, growing housing prices permit wealthier individuals to ‘target’ education in ways that exclude lower income citizens. Districts with higher house prices have higher average academic performance but also greater variation in performance and a greater number of schools opting out of local authority control. Moreover, in districts with high variation in school performance, owners of expensive housing are more satisfied with schooling than are non-owners, with the reverse pattern obtaining in districts with low academic variation.

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