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The Effect of Bilingual Education on Housing Price-a Case Study of Bilingual School Conversion

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Abstract

This paper presents a case study of the impact of bilingual school designation on housing price by analyzing the case of school conversion from a monolingual school to a bilingual school in Melbourne. We find that house price within the pertinent school catchment area responds positively by 7.8%–8.7%. Moreover, we find no significant response in the unit market where residents are less likely to be households with children. Analysis with substituted control groups such as the test catchments with extended surrounding areas, other bilingual school catchment areas, and school catchment areas of public schools with a similar level of academic performance confirms that bilingual education is positively capitalized in the house submarket.

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Notes

  1. Detailed information can be found at: https://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/2071.0~2016~Main%20Features~Apartment%20Living~20

  2. Fuller description of the process can be found at: https://www.education.vic.gov.au/school/teachers/teachingresources/discipline/languages/manage/Pages/languagestart.aspx

  3. The main area of our study (treatment area) contains 4 postcodes: 3054, 3056, 3057, and 3068. According to the 2016 Census of Australia, the treatment area shows higher proportion of residents with Italian ancestry or born in Italy. Below is a summary table of Italian residents in the 4 postcodes and Victoria state.

    Area

    3054

    3056

    3057

    3068

    Victoria

    From Italian Ancestry

    7.7%

    7.7%

    9.0%

    5.6%

    4.5%

    Born in Italy

    2.3%

    3.4%

    4.0%

    1.8%

    1.2%

    Speaking Italian

    4.5%

    5.4%

    6.7%

    3.1%

    1.9%

  4. Related news article can be found at: https://ilglobo.com.au/news/33440/victorias-first-italian-bilingual-school-celebrates-a-milestone/

  5. The information regarding the statistics of residents with Italian ancestries in Brunswick is collected in the 2011 and 2016 Censuses. The detailed information can be found at: http://www.censusdata.abs.gov.au/census_services/getproduct/census/2016/quickstat/SSC20359

  6. The school catchment area contains areas from postcodes 3054, 3056, 3057, and 3068.

  7. We use the NAPLAN (National Assessment Program-Literacy and Numeracy) score to sort out the schools with similar performance. NAPLAN assesses the literacy and numeracy level of students in year 3 and year 5 of all primary schools in Australia. Similar schools are found on the web page of www.myschool.edu.au, which is managed by Australian Curriculum, Assessment and Reporting Authority. Details of NAPLAN scores and comparisons can be found at https://www.myschool.edu.au/school/44505/naplan/similar/2015.

  8. In the unit submarket, the sample includes student housing or boarding units with studio type residence and shared bathroom. Thus, it is not unnatural to have 0 for number of bedrooms or bathrooms. In the house submarket, partial bathrooms without full bath facilities are recorded as zero in the raw data. We replaced zero for these observations with 0.5 bathrooms. Additionally, residents in the older houses use street parking, as old houses often have no separate parking spaces onsite. Thus, having zero parking space in house submarket is not unnatural.

  9. We also conducted additional analysis to see if the response is stronger in the area with higher density of Italian descendants. Postcode 3057 has the highest proportion of Italian descendants with 9% compared with 5.6%–7.7% in the other postcodes within the treatment area. When a dummy variable with postcode 3057 is interacted with the DID interaction term, the coefficient is statistically insignificant and either negative or close to zero.

  10. The coefficients of No. of Parking Space in column (5)–(8) are negative and statistically significant in column (6) and (8). This variable is generally expected to have positive impact on the property price. We recheck the dataset and find that sales agents sometimes include shared parking spaces as if these parking spaces are parts of the title. To alleviate this concern, we repeat the same regression without the variable of number of parking space and find the coefficients of interactive term After X Brunswick South Catchment do not change significantly.

  11. http://stat.data.abs.gov.au/Index.aspx?DataSetCode=ABS_C16_T23_SA#

  12. More detailed information can be found in the following website: https://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/2071.0~2016~Main%20Features~Apartment%20Living~20

  13. This figure is from a minister’s forum context report published by the Department of Environment, Land, Water and Planning of Victoria. A full report can be found at: https://www.planning.vic.gov.au/__data/assets/pdf_file/0030/9984/Better-Apartments-Ministers-Forum-Context-Report-2015.pdf

  14. We checked the change of supply level in the four-postcode area. The number of new listings in the house submarket increased moderately, while the supply level was stable in the unit submarket. If the market was affected by the change of supply level, we suppose that it should have affected the price level negatively, which is contrary to our findings. Below is a summary of listings in each year from the four-postcode area.

     

    2014

    2015

    2016

    2017

    House

    2664

    2089

    2141

    2602

    Unit

    4051

    5552

    5865

    5955

  15. One might suspect that using the monolingual schools surrounding the treatment area is an alternative model specification. However, in the expanded area, more than 10 monolingual schools are included. Thus, it is also found that there the price level in the treatment area had a positive change compared to other monolingual schools in the proximity of distance from the treatment area.

  16. 12 bilingual schools are: Abbotsford Primary School (Chinese), Aurora School (Auslan), Bayswater South Primary School (German), Benalla East Primary School (Indonesian), Brunswick South Primary School (Italian), Camberwell Primary School (French), Caulfield Primary School (Japanese), Footscray Primary School (Vietnamese), Gruyere Primary School (Japanese), Huntingdale Primary School (Japanese), Kennington Primary School (Auslan), Lalor North Primary School (Macedonian, Modern Greek), Richmond West Primary School (Chinese, Vietnamese). The two schools with Auslan education are not included in the control group since Auslan is Australian sign language, and Gruyere Primary School is excluded due to a remote distance from the treatment area. All the catchment areas are shown in Figure 3.

  17. Additional analysis is conducted to find the change of house price in the bilingual catchment area compared with the monolingual schools. The result finds that the price change in the other bilingual school catchment area is statistically and economically insignificant. The coefficients ranges from 0.010 to 0.017 and statistically insignificant at 10% confidence level.

  18. For more information about the level crossing removal project, please refer to https://levelcrossings.vic.gov.au/

  19. The ranking of primary schools by Better Education can be found at: https://bettereducation.com.au/Default.aspx

  20. The information regarding the statistics of immigration of Victoria is collected in the 2016 Censuses. The detailed information can be found at http://www.abs.gov.au/ausstats/abs@.nsf/mf/3412.0/

  21. Fuller story of the argument can be found at: https://www.abc.net.au/news/2017-10-06/impact-of-chinese-buyers-on-australian-house-prices/9021938

  22. Potential real estate buyers who are not citizens or permanent residents of Australis need to get approval from the Australian Foreign Investment Review Board in advance. Figure 5 shows the trend of approvals granted by the Australian Foreign Investment Review Board.

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  1. Department of Finance, Faculty of Business and Law, Deakin University, 70 Elgar Road, Burwood, Victoria, 3125, Australia

    Kang Mo Koo & Jerry Liang

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Koo, K.M., Liang, J. The Effect of Bilingual Education on Housing Price-a Case Study of Bilingual School Conversion. J Real Estate Finan Econ 62, 629–664 (2021). https://doi.org/10.1007/s11146-020-09754-9

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