Effects of private education fever on tenure and occupancy choices in Seoul, South Korea
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Effects of private education fever on tenure and occupancy choices in Seoul, South Korea Jonghoon Park1 · Seongwoo Lee2 Received: 7 August 2018 / Accepted: 1 August 2020 © Springer Nature B.V. 2020
Abstract This study investigates how private education fever affects tenure and occupancy choices in Seoul, South Korea. We used a bivariate probit model to control for sample selection bias that could be caused by sample selectivity from a chain of tenure and occupancy choices. This study found that households with school-age children seem to utilise housing occupancy choice through location choice. Moreover, opportunity for private education is more important to households with school-age children than for households without schoolage children, and households with school-age children are more likely to choose a housing occupancy and residential location offering better chances for private education. The study’s main contributions, limitations, and policy implications are described. Keywords Education fever · Tenure · Occupancy · Seoul · South korea · Bivariate probit
1 Introduction One-dimensional investigations of housing tenure using only ‘owning’ and ‘renting’ classifications have been the taxonomic norm in the homeownership literature, based on the assumption that each household has only one status with respect to its current housing. Designing a sub-tenure choice framework, however, Ioannides and Rosenthal (1994) initiated a tenure choice model by constructing two dimensions of tenure choice: ownership and occupancy. They show that the residence of most homeowners is determined primarily by their consumption demand, which is more sensitive to demographic characteristics and locational amenities. In particular, finding a new residence in a better educational environment is a crucial criterion of relocation decisions for most households (Barrow 2002; * Seongwoo Lee [email protected] Jonghoon Park [email protected] 1
Department of Economics, Hanbat National University, S3‑dong 712‑ho, Dongseo‑daero 125, Yuseong‑gu, Daejeon 34158, South Korea
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Research Institute of Agriculture and Life Sciences and Department of Agricultural Economics and Rural Development, Seoul National University, 200‑dong 8219‑ho, Kwan‑ak Ro 1, Kwan‑ak Gu, Seoul 08826, South Korea
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Chung 2015; Yi et al. 2017). However, this decision is particularly critical for Korean parents, who have the world’s most intense ‘educational fever’ (Woo and Hodges 2015). The education system in South Korea (‘Korea’ hereafter) has been highly regarded by many other countries. However, Korea trails behind other OECD countries in terms of educational environment. This environment is characterised by high average private costs and lower-than-normal government support (OECD 2014). Korea spent 7.6% of its GDP on public education, which is 1.5% greater than the OEDC average of 6.1%. However, the government’s contribution was 4.9%, which places Korea 0.4% below the 5.3% OECD average. On the other hand, Korea’s 2
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