The capitalisation of school choice into property prices: a case study of grammar and all ability state schools in Buckinghamshire, UK

There has been a growing academic and policy debate in the UK on the relationship between school choice, educational performance and house prices. School choice and the chances of attending a good school are important as it relates strongly to educational attainment and qualifications, University entry and access to the labour market. This debate was reinvigorated recently when the Conservative Party announced that state schools which select using academic ability (grammar schools) may be able to expand in England for the first time in decades. Some commentators argued that this may exacerbate and re-enforce existing inequalities in the education system by allowing wealthy parents to ‘buy’ into a particular grammar school via the housing market, leading to “selection by mortgage” as well as by academic ability. This research investigates the extent to which state schools are capitalised into house prices using Buckinghamshire in England as a case study. It differentiates between grammar schools and all ability state schools, using a novel multi-level specification of the repeat sales model. It concludes that single sex boys’ grammar schools attract a higher premium than single sex girls’ grammar schools and that in general, grammar schools attract a higher premium than all ability state schools. These premiums are a function of educational attainment and demand for places and tend to vanish once these have been taken into account, although for a small number of schools notable premiums remain, perhaps reflecting school characteristics such as reputation not captured in the models.