Urban Amenities

City governments have been competing with each other by providing favorable industrial policies to attract firms. More recently, policymakers have put more emphasis on urban amenities, as high-quality welfare is one of the incentives to attract talents. In this section, we will look at education facilities in Beijing, one of the most important urban amenities.

Land and residential property markets in a booming economy: New evidence from Beijing
 

This study took place in 2008, when Beijing's housing market has boomed for over fifteen years. Between 1991 and 2005, the city's population grew by 40.6% and per capita income (in constant RMB) by 273.9%. In 2005, the quantity of newly completed residential construction reached 28.4 million square meters, accounting for 13.1% of the existing housing stock. 

 

The explosive growth of new construction is remaking the face of the city. In this study, we want to use the gradient of land prices and real estate prices to infer Beijing's evolving urban form when it's transferring from planning economy to the market economy. In addition, we also test whether local public goods capitalization in the US also happens in the context of Beijing.

Spatial distribution of land parcels in Beijing

The evolving urban form:

In this study, we use two data sets to present new evidence for Beijing's monocentric model. In particular, we use real estate price gradient, land price gradient, population densities, and building densities.

Land prices and real estate prices decline with respect to distance from the Center City. The commercial land pricing gradient declines more steeply with distance from the CBD than does the residential land pricing gradient. Unlike in major US cities, the land parcel’s zoned density and dwelling size of newly constructed residential projects do not decline with distance from the CBD.

Local public goods are capitalized into real estate prices:

How Much Is a Good School Worth in Beijing?Identifying Price Premium with Paired Resale and Rental Data
 

School quality has been capitalized in home values in Beijing. 

In this study, we compare average housing price per square meter of out-of-zone housing complexes to those of nearby within-zone housing complexes. Taking advantage of the unique renter discrimination education policy in Beijing, we further control for the difference in unobserved neighborhood traits using the rental differentials of housing complexes in and out of the attendance zones of the Key Primary Schools. This innovative approach enables a more robust identification of the home value impact of school quality.


This study provides one of the first pieces of evidence on the capitalization of school quality in home values in China, the world’s largest emerging economy. We find robust evidence that school quality has been capitalized in home values in Beijing. As of fall 2011, a within-zone complex claimed on average a 2,265.8 yuan/m2 (6.8% of sample mean) price premium over those outside the attendance zone of a Key Primary School in Beijing. We also find evidence of unobserved neighborhood characteristics that bias the estimates of not only a traditional hedonic regression, but also a boundary fixed effect model that does not control for unobserved differences due to residential sorting.

Congestion and Pollution Consequences of 

Driving-to-school Trips: A Case Study in Beijing

 

Traffic congestion in front of a school gate

credit: online source

Parents compete for high-quality education for their children by enrolling them in good schools. However, in a Chinese mega-city like Beijing, three factors jointly lead to the spatial separation between schools and homes: the centralized public goods provision mechanism, the historical dependency in school location, and the constrained supply of housing in downtown. Without an adequate number of school buses, this spatial separation of schools and homes triggers the numerous long-distance driving-to-school trips by private vehicle during workday morning rush hours in Beijing.

As a result of the centralized public goods provision mechanism and historical dependency in school location, public schools, especially high-quality ones, are spatially concentrated in the inner city, while new housing developments are located in the outer city.

15% of all morning rush hour trips on a typical workday are for driving to school.

Does the spatial mismatch of schools and households contribute to traffic congestion and further aggravate air pollution?

In this paper, school holidays (especially the summer ones) are used as exogenous repeated shocks to first estimate how much such trips affect Beijing’s aggregate traffic congestion. 

We then employ two-stage least squares regression approach to examine the causal effect from the congestion to air pollution. Both the narrow time window and instrumental variable strategy are used to exclude most unobserved variables and mitigate the endogeneity bias. 

Conclusion

All else being equal, workdays during school holidays without driving-to-school trips enjoy a 20% lower morning rush-hour congestion index (TCI) than non-school-holiday workdays. Such a sharp drop in TCI observed during summer school holidays leads to a significant decrease in PM10 concentration.

 

Based on our empirical results, it is expected that reducing the spatial mismatch of good schools and homes will mitigate traffic congestion and air pollution. In recent years, Beijing municipal government has sought many solutions to this ‘‘schools - homes” spatial separation problem, such as relocating good schools (or establishing new ones) in suburban areas to match the ongoing residential suburbanization, periodically adjusting the good schools’ corresponding zones, and allowing private-public partnerships in good school provisions and school bus services.

Team

Siqi Zheng

MIT Sustainable Urbanization Lab, Department of Urban Studies and Planning, Center for Real Estate

 

Ming Lu

Shanghai Jiaotong University and Fudan University

 

Cong Sun

Shanghai University of Economics and Finance

 

Wanyang Hu

Hang Lung Center for Real Estate, Tsinghua University

 

Rui Wang

Luskin School of Public Affairs, University of California, Los Angeles

 

Matthew Kahn

Johns Hopkins University and NBER

Publications


Lu, Ming, Cong Sun, and Siqi Zheng. "Congestion and pollution consequences of driving-to-school trips: A case study in beijing." Transportation Research Part D: Transport and Environment 50 (2017): 280-291.


Zheng, Siqi, Wanyang Hu, and Rui Wang. "How much is a good school worth in Beijing? Identifying price premium with paired resale and rental data." The Journal of Real Estate Finance and Economics 53, no. 2 (2016): 184-199.


Zheng, Siqi, and Matthew E. Kahn. "Land and residential property markets in a booming economy: New evidence from Beijing." Journal of Urban Economics 63, no. 2 (2008): 743-757.

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