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Paying for priority in school choice: Capitalization effects of charter school admission zones

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  • Andreyeva, Elena
  • Patrick, Carlianne

Abstract

We exploit a unique characteristic of some charter schools in the metropolitan Atlanta area to identify property value capitalization of access to charter schools. The charter schools in this study designate small geographic areas within their attendance areas as priority zones. Each of the study charter schools has at least two priority zones: households located in priority one zones have a higher probability of admission than households located in priority two zones. We use this spatial variation in the likelihood of attending a charter school to identify the capitalization effect of increased charter school admission probabilities as the difference-in-differences within priority zone one and two border areas. Our results indicate that prices increased by six to eight percent for priority one zone homes compared to priority two zone homes after the opening of a new charter school. We also find that capitalization is stronger for homes with underperforming traditional public schools.

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  • Andreyeva, Elena & Patrick, Carlianne, 2017. "Paying for priority in school choice: Capitalization effects of charter school admission zones," Journal of Urban Economics, Elsevier, vol. 100(C), pages 19-32.
    • Handle: RePEc:eee:juecon:v:100:y:2017:i:c:p:19-32
    DOI: 10.1016/j.jue.2017.04.002
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    1. Feng Lan & Qi Wu & Tao Zhou & Huili Da, 2018. "Spatial Effects of Public Service Facilities Accessibility on Housing Prices: A Case Study of Xi’an, China," Sustainability, MDPI, vol. 10(12), pages 1-20, November.
    2. Frederic Ang & Kristiaan Kerstens, 2021. "Energy Productivity And Greenhouse Gas Emission Intensity In Dutch Dairy Farms: A Hicks-Moorsteen By-Production Approach Under Nonconvexity," Working Papers 2021-EQM-07, IESEG School of Management.
    3. Chen, Yu & Shi, Shaobin & Tang, Yugang, 2019. "Valuing the urban hukou in China: Evidence from a regression discontinuity design for housing prices," Journal of Development Economics, Elsevier, vol. 141(C).
    4. Xuejuan Su & Huayi Yu, 2022. "Valuing elementary schools: evidence from public school acquisitions in Beijing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(4), pages 1117-1141, October.
    5. Muñoz-Morales, Juan & Singh, Ruchi, 2023. "Do school shootings erode property values?," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    6. Chan, Jimmy & Fang, Xian & Wang, Zhi & Zai, Xianhua & Zhang, Qinghua, 2020. "Valuing primary schools in urban China," Journal of Urban Economics, Elsevier, vol. 115(C).
    7. Pengyu Zhu & Yi Zhang & Juan Wang, 2023. "Canceling the admission priority of private schools enlarges housing price gap in public school districts: Evidence from Shanghai's new admission policy," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(1), pages 49-67, January.
    8. Andrew Bibler & Stephen B. Billings, 2020. "Win or Lose: Residential Sorting After a School Choice Lottery," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 457-472, July.
    9. Eli Beracha & William G. Hardin, 2021. "The housing price premium associated with charter schools," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 49(4), pages 1267-1289, December.
    10. Crocker H. Liu & Patrick S. Smith, 2023. "School quality as a catalyst for bidding wars and new housing development," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(4), pages 785-818, July.
    11. Rajapaksa, Darshana & Gono, Marcel & Wilson, Clevo & Managi, Shunsuke & Lee, Boon & Hoang, Viet-Ngu, 2020. "The demand for education: The impacts of good schools on property values in Brisbane, Australia," Land Use Policy, Elsevier, vol. 97(C).
    12. Su, Xuejuan & Yu, Huayi, 2019. "How Much are Good Schools Worth? Evidence from School Acquisitions in Beijing," Working Papers 2019-12, University of Alberta, Department of Economics.
    13. Ding, Kangzhe & Itoh, Ryo, 2023. "JUE Insight: The impact of the school admission restriction policy on the housing market in Shanghai," Journal of Urban Economics, Elsevier, vol. 136(C).
    14. Kang Mo Koo & Jerry Liang, 2021. "The Effect of Bilingual Education on Housing Price-a Case Study of Bilingual School Conversion," The Journal of Real Estate Finance and Economics, Springer, vol. 62(4), pages 629-664, May.
    15. Michio Naoi, 2020. "School Quality and Residential Property Values: A Review of Recent Developments and Applications," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 16(6), pages 1-23, September.
    16. Xiao Tian & Jin Liu & Yong Liu, 2022. "How Does the Quality of Junior High Schools Affect Housing Prices? A Quasi-Natural Experiment Based on the Admission Reform in Chengdu, China," Land, MDPI, vol. 11(9), pages 1-18, September.
    17. Doko Tchatoka, Firmin & Varvaris, Vanessa, 2021. "Neighbourhood, school zoning and the housing market: Evidence from New South Wales," Journal of Housing Economics, Elsevier, vol. 54(C).

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    More about this item

    Keywords

    Charter schools; Property value capitalization; School choice; Hedonic difference-in-differences;
    All these keywords.

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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