Private school location in the UK

This research examines the location choice of private schools entering the UK schooling market 1996- 2003. I develop a theoretical model with peer eects in which individuals dier along two dimensions, income and religion. Demand for secular state, secular private and religious private education is de- termined by the level of quality of state education, the income distribution and the relative size of the religious group. Using a count data empirical model, I …nd that secular private schools tend to open in locations where the fraction of rich individuals is high but, holding the fractions of rich and poor constant, mean income is relatively low. Moreover, they appear more likely to enter where ethnic heterogeneity is relatively high, and where overall academic performance is relatively poor. Furthermore, I …nd that schools belonging to religious minority groups (Muslim schools) have very dierent location patterns from other private schools. In particular, the income variables are no longer signi…cant determinants and, if anything, they have the opposite signs. However, both types of private schools contribute to more homogeneous student populations within schools along the lines of income and religion/ethnicity. The …ndings are consistent with the predictions yielding from the theoretical model.