School allocation rules and housing prices: A quasi-experiment with school relocation events in Singapore

• This study uses a distance-based school allocation priority rule in Singapore to test school relocation effects on housing prices
• Private housing prices in 1-km and 1-km to 2-km zones decline by 2.9% and 6.0%, respectively, 6 months before the relocations
• Larger price declines of 5.5% and 6.9% in 1-km and 1-km to 2-km zones, respectively, 12 months before the relocations
• The relocations cause public housing price to decline by between 0.7% and 1.4% in the 1-km school zone
• The school relocation treatment effects are amplified by the school popularity ranking

This study uses a unique distance-based school allocation priority 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% are found for houses located in 1 km and 1 km to 2 km school zones 12 months before the school relocations. In the public housing market, we 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.