chair rails are usually about 36 to 42 inches high, really depends. If you go the chair route, i would still insert new drywall in the 18 inch gap all around. It would not need to be taped and bedded, just a good tight fit. This would allow the wainscoting to be even and smooth. Then too, you can mark the spacing of the wall studs on the base board so you will know where to do the nailing. Be careful NOT to nail around electrical or piping areas.
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