This study challenges the prevalent understanding of a linear relationship between housing prices and school academic performance by examining the impact of entrance opportunity on housing sales and rental prices in Shenzhen, China. Using machine learning algorithms, the study reveals that housing rental prices, particularly in the lower-priced segment, are more influenced by entrance opportunity, while housing sales prices are primarily driven by academic performance. A nonlinear capitalization effect is observed, with tenants and homebuyers willing to pay more for school quality increases only within specific ranges. These findings contribute to a nuanced understanding of education capitalization and inform urban planning and governance.

Lirong Hu, Shenjing He