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Grade inflation in UK primary schools adds thousands to cost of family home

Staff Writer |
Grade inflation at English primary schools can increase the price of surrounding houses by up to £7,000.

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This is according to early research from economists at Queen Mary University of London (QMUL).

The study finds that as parents are drawn to areas with what appear to be higher school scores, the demand for housing escalates and poorer residents are driven out.

The researchers examined data from more than 23,000 neighbourhoods in England, using results of more than five million students enrolled since 1998.

The study, published as a QMUL School of Economics and Finance Working Paper, looked at the period from 1998 to 2007, when English schools used a process called "borderlining" to regrade exams from students who narrowly missed out on a higher Key Stage result.

Erich Battistin, Professor of Economics at QMUL and lead author of the study says the period provides a "perfect test environment" to interrogate an important policy question: can grade inflation change the composition of neighbourhoods?

Borderlining was abolished in 2007 by the Department of Education, following evidence that the procedure caused grade inflation in primary schools for thousands of students.

However, the effects of grade inflation that accumulated over one decade before the abolition of borderlining triggered inequalities across neighbourhoods that are persistent and identifiable through to the present day.

The results of the study, co-authored with Dr Lorenzo Neri from QMUL, show that a three percentage point increase (from a baseline of 26 per cent) in the number of students who perform above expectations at Key Stage 2 increases local house prices by 1.5 per cent.

The effect on prices is more dramatic in areas with more than one good school. According to Dr Neri, this is due to a "hedging effect," where parents gravitate more strongly to areas that have a number of highly-rated schools.

He says that in these areas the combined grade inflation of more than one school can increase house prices by three per cent, or £7,000.

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