I am puzzled by the argument, as I was when I read the piece the first time. Why are the authors sure that they know the direction of the causal arrows? Why do they think there are causal arrows?

I am not aware of independent information about the quality of public schools, and none is offered. If we had that, then we could look for correlations between school quality and real estate prices. In its absence, the quality of schools seems to be inferred from real estate prices, which is to assume the relationship.

Maybe there's something there, but I'm not persuaded. You could argue it the other way. In wealthier areas, kids are more likely to come from families which provide books, support and encouragement for education, which is likely to improve the general quality of the classroom experience not just for them but for others less favoured. Even that doesn't persuade me, for I know of high-quality public schools in areas where real estate privces are simply average. My grandchildren attend such a school, and its culture and quality are most impressive.

In short, we need much more information. Without it, I am reminded of the fact that there is an extraordinarily high correlation between the increases in the salaries of Presbyterian ministers and the increase in the consumption of Scotch whisky.

I'm confused (whats new)

Canberra is a strange place to draw conclusions from. It has a unique system of senior colleges (yrs 11 and 12).

If you moved "Grammar, St Eddies" etc to Banks I bet property prices would stay the same.

Is Red Hill expensive because of its schools or its "image"?

I am sick to death of these never ending attempts to impose an equality in education that simply does not, and never will exist. Perhaps the next thing we will hear is that children with an IQ above a certain level should not receive any education at all, as the only way that we can have equality of outcome, which is what so many people on the left seem to want.

If you want to introduce an automatic mechanism to improve public education in NSW all you have to do is to amend the NSW Constitution act to provide:

1. No person can become Premier unless they have school age children.

2. As a condition of remaining Premier, these children shall be educated at the public school selected by the Leader of the Opposition.

"Not only can poor families not afford access to private schools, they are often also locked out of the best public schools. Given that education can transform the social and economic opportunities of the underprivileged, this may perpetuate the cycle of intergenerational disadvantage."

I fail to see why you take issue with this Ian. Somebody has to dry clean our clothes, deep-fry our chips, tear our ticket stubs; what better way to ensure a plentiful supply of cheap labour than by ensuring an intergenerational disadvantage in education? The poor and disadvantaged have been selected for that role by God, who are we to change that path? For these people, intellectual activity is a danger to the building of character.

Jasper
http://blackbilebox.blogspot.com/

Davidoff and Leigh suggest that parents in Canberra will pay an extra $13,000 for a house in a "good public school" area, and use this as a proxy for willingness to spend on education. However, a house is (generally) an appreciating asset, and the opportunity cost to the buyers is only the difference between their return on the house and that on their best alternative investment - a much lower, perhaps negative, figure.

Don, the answer to your question is that we use the discontinuity in boundaries. Think of it as comparing houses on either side of the same street. Identical amenties, income, etc. The only difference is that the two sides of the street are in different school zones. The paper has more details on the approach.