Capitalization of secondary school education into property values: A case study in Hong Kong

Wadu Mesthrige, J and Lam, S 2015, 'Capitalization of secondary school education into property values: A case study in Hong Kong', Habitat International, vol. 50, pp. 12-22.

Document type: Journal Article
Collection: Journal Articles

Title Capitalization of secondary school education into property values: A case study in Hong Kong
Author(s) Wadu Mesthrige, J
Lam, S
Year 2015
Journal name Habitat International
Volume number 50
Start page 12
End page 22
Total pages 11
Publisher Elsevier
Abstract Investment in quality education in the neighbourhood would be supported by the people as it is often cited as an important attribute that distinguishes a community. A good quality school-network thus can be viewed as a positive amenity that is capitalized into residential property values. The study employs two hedonic models based on two large samples in order to explore the intuition that quality-school environment is capitalized into house prices. Results suggest that there is a significant effect of school-quality on house price. Potential buyers are ready to pay a large premium ranging from 27% to 39% for housing units in the top-tier school-networks. Results further reveal that the extent of capitalization of school quality into house price varies across locations. Results also suggest that property buyers rank variables such as quality school-network higher than such profile issues as age, floor level, and accessibility to transport and shopping. The findings imply that investment in quality education in the neighbourhood enhances the house property value significantly; and well-known elite schools add value to properties and increases in property price. These findings shed light on the market's ability to capitalize quality-school environment into property value though the extent of capitalization may vary across locations.
Subject Built Environment and Design not elsewhere classified
Keyword(s) Capitalization
Hong Kong
Property values
Quality school network
DOI - identifier 10.1016/j.habitatint.2015.07.011
Copyright notice © 2015 Elsevier Ltd. All rights reserved.
ISSN 0197-3975
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