We would like to thank the Leverhulme Foundation and the Lincoln Institute of Land Policy for supporting the work underlying this paper. We would also like to thank numerous colleagues, the referees and the Editor of this Journal for valuable comments and insights. The usual disclaimer applies with respect to remaining errors.
Capitalising the Value of Free Schools: The Impact of Supply Characteristics and Uncertainty*
Article first published online: 18 OCT 2004
The Economic Journal
Volume 114, Issue 499, pages F397–F424, November 2004
How to Cite
Cheshire, P. and Sheppard, S. (2004), Capitalising the Value of Free Schools: The Impact of Supply Characteristics and Uncertainty. The Economic Journal, 114: F397–F424. doi: 10.1111/j.1468-0297.2004.00252.x
- Issue published online: 18 OCT 2004
- Article first published online: 18 OCT 2004
This paper explores the sources and impact of variations of a given school quality at either primary or secondary level as capitalised into the price of houses. The results provide new evidence on the complex and subtle ways in which housing markets capitalise the value of local public goods such as school quality and suggest that this is highly nonlinear. We expect variation in the capitalised price according to the elasticity of supply of ‘school quality’ in the local market, the certainty with which that quality can be expected to be maintained and the suitability of the dwelling to accommodate children.