Hedonic analysis and time‐varying capitalization: An application using school quality

Abstract

This paper investigates the dynamics of school quality capitalization during the boom–bust cycle of the housing market. We find that the housing downturn led to a sharp increase in capitalization for high‐quality schools, whereas the boom and recovery periods saw a decline in valuation for top schools. Hence, the capitalization of school quality exhibits a strong countercyclical trend with the overall housing market. We test whether our findings are driven by households “trading down” from private schools during downturns or the fact that the housing supply responds asymmetrically during the boom and bust, but we find little support for these propositions.

Changes in Amenity Values after COVID‐19 Lockdowns in Auckland, New Zealand

“…Table 2 breaks down the observations by their location relative to amenities and lockdown phases. All models include fixed effects by suburb to proxy for unobservable time-invariant features such as school quality or any other character features at neighbourhood-level (Ahlfeldt & Maennig, 2010;Klaiber et al, 2017;Towe & Tra, 2019). Time effects by quarter and year are included to control for annual trends and to capture intra-annual cyclical movements (Moore et al, 2020).…”

“…This paper adds to the broad literature on the valuation of environmental and urban amenities. Housing markets experience cycles so that the capitalisation of amenities is not constant over time (Kuminoff et al, 2010;Fernandez & Bucaram, 2019;Towe & Tra, 2019). Often households may regard amenities as a hedge against likely housing price drops during market downturns (Chernobai & Chernobai, 2013;Coulson & Zabel, 2013;Sinai & Souleles, 2013;Zabel, 2015); nonetheless, during an economic recession, reductions in household income may decrease demand for amenities, provided they are normal goods (Kuminoff et al, 2010).…”

“…Often households may regard amenities as a hedge against likely housing price drops during market downturns (Chernobai & Chernobai, 2013;Coulson & Zabel, 2013;Sinai & Souleles, 2013;Zabel, 2015); nonetheless, during an economic recession, reductions in household income may decrease demand for amenities, provided they are normal goods (Kuminoff et al, 2010). However, an exogenous shock related to a sanitary and health crisis may imply different dynamics on the likely changes of the implicit prices of amenities Towe & Tra, 2019). At least one other study has documented such changes due to the pandemic and mandated lockdowns (Irwin & Livy, 2021).…”

Kindergarten Proximity and the Housing Market Price in Italy

“…Therefore, it is expected that this preference influences the residential location and, in turn, property values. While the existing literature on schooling and house market prices has investigated the impact of school quality on housing price in numerous countries (Black 1999;Downes and Zabel 2002;Kane et al 2003Kane et al , 2006Figlio and Lucas 2004;Brasington and Haurin 2006;Clapp et al 2008;Gibbons and Machin 2008;Nguyen-Hoang and Yinger 2011;Machin 2011;Gibbons et al 2013;Livy 2017;Yi et al 2017;Towe and Tra 2019;Turnbull et al 2017;Turnbull and Zheng 2019;Bonilla-Mejìa et al 2019), there is no research focusing on the relationship between accessibility to kindergartens and housing price in Italy.…”