The heterogeneous impact of house purchase limits policy on housing prices: Comparison between elite and non-elite school district houses

The effectiveness of housing purchase limits policies has aroused heated debate, yet few discussed its impact on educational capitalization. We examine the heterogeneous effect of housing purchase limits policy on the price of elite school district houses (ESDH) and non-elite school district houses. By exploiting second-hand houses data in Hefei China, we find that the price of ESDH has increased greatly after the limitation, compared with non-elite school districts. Further we discover that the ESDH have lower depreciation risks, and their price is higher in neighborhoods with smaller dwelling area. Our finding indicates that the limits policy may have exacerbated the educational capitalization.