House Prices and School Quality: The Impact of Score and Non-score Components of Contextual Value Added in UK (New Version)

Abstract

This paper investigates how the score and non-score components of the newly introduced Contextual Value Added (CVA) indicator of school quality affect house prices in the catchment area of primary and secondary schools in England. The empirical analysis, based on data drawn from UK data sources, shows that the score component of CVA is positively associated with house prices at both primary and secondary levels of education; while its non-score component has a negative significant association with house prices in the analysis of secondary school data, but no significant association in the corresponding analysis of primary school data. Furthermore, the willingness of households to pay more for a high quality secondary education appears to depend entirely on the final score and is influenced by school comparison within (rather than between) Local Authorities. For primary schools, however, the non-score component of CVA also adds to house prices. This appears to be more so between Local Authorities, highlighting the ‘public good’ nature of this school quality indicator.