NEGATIVE EXTERNALITIES ARISING FROM SCHOOLS: DO THEY OUTWEIGH HOUSING VALUE PREMIUMS?

Abstract

This study identifies school relocations, and the opening of new schools as treatment events to study the effects of negative externalities generated by schools on housing prices. Under-subscribed primary schools were sampled to isolate the negative externality effect from amenity premiums observed from more popular and prestigious schools. Using public housing resale transactions spanning from 2005 to 2020, the results show that public housing located 250 m and less from the treatment event experienced a significant -3% price discount over housing located 251 to 1000 m away. This discount effect may be attributed to negative externalities such as noise and traffic congestion generated from the school and has a significant impact on the public housing market proximate to primary schools.