Best Education Money Can Buy? Capitalization of School Quality in Finland

Tuukka Saarimaa, Oskari Harjunen and Mika Kortelainen

No 58, Working Papers from VATT Institute for Economic Research

Abstract: By international comparison, Finnish pupil achievement is high and school achievement differences small. The Finnish education system is unusual also because there are no national testing programs and information on school quality measures is not publicly disclosed. Is school quality capitalized into house prices in this environment? Using a boundary discontinuity research design and data from Helsinki, we find that it is: a one standard deviation increase in average test scores increases prices by roughly 2.5 percent, which is comparable to findings from the U.K and the U.S. This price premium is related to pupils' socioeconomic background rather than school effectiveness.

Keywords: Boundary discontinuity, House prices, School quality, Spatial differencing, Local public economics, Kunnallistalous, Public services, Julkiset palvelut, C210 - Econometric Methods: Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models, I200 - Education: General, R210 - Urban, Rural, and Regional Economics: Housing Demand, H750 - State and Local Government: Health; Education; Welfare; Public Pensions, (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-edu and nep-ure
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Citations: View citations in EconPapers (3)

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https://www.doria.fi/handle/10024/148798

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Journal Article: Best Education Money Can Buy? Capitalization of School Quality in Finland (2018)
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