School Districting and the Origins of Residential Land Price Inequality

This paper examines how education policy generates residential sorting and changes residential land price inequality within a city. In 1974, Seoul shifted away from an exam based high school admission system, created high school districts and randomly allocated students to schools within each district. I examine how residential land prices change across school districts using a first differenced boundary discontinuity design. By focusing on the immediate years before and after the creation of school districts and using general functional forms in distance, I find that residential land price increases by about 13% point more on average and by about 26% point across boundaries in the better school district. In sum, residential land prices increase with the creation of school districts and more pointedly in the better school districts. Such change could impact low-income renter households unless school districting is accompanied by a comparable increase in wages.