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Which school attributes matter? The influence of school district performance and demographic composition on property values

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Author Info
Clapp, John M.
Nanda, Anupam
Ross, Stephen L.

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Abstract

Increasing levels of segregation in American schools raises the question: do home buyers pay for test scores or demographic composition? This paper uses Connecticut panel data spanning eleven years from 1994 to 2004 to ascertain the relationship between property values and school district attributes, such as student test scores and the racial and ethnic composition of the student body. Town and census tract fixed effects are included to control for neighborhood unobservables. The effect of changes in school district attributes is also examined over a decade long time frame in order to focus on the effect of long-run changes, which are more likely to be capitalized into prices. The study finds strong evidence that increases in percent Hispanic have a negative effect on housing prices in Connecticut, but mixed evidence concerning the impact of test scores on property values. Student test scores also appear to have increased in importance for explaining housing prices in recent years, while the importance of percent Hispanic has declined. Finally, the study finds that estimates of property tax capitalization increase substantially when the analysis focuses on long run changes.

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Publisher Info
Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 63 (2008)
Issue (Month): 2 (March)
Pages: 451-466
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Handle: RePEc:eee:juecon:v:63:y:2008:i:2:p:451-466

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Web page: http://www.elsevier.com/locate/inca/622905

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Related research
Keywords: School district performance Test scores Demographics House price Omitted neighborhood attributes Tax capitalization;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  5. Macpherson, David A & Sirmans, G Stacy, 2001. "Neighborhood Diversity and House-Price Appreciation," The Journal of Real Estate Finance and Economics, Springer, vol. 22(1), pages 81-97, January. [Downloadable!] (restricted)
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  12. Jan Ondrich & Stephen Ross & John Yinger, 2003. "Now You See It, Now You Don't: Why Do Real Estate Agents Withhold Available Houses from Black Customers?," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 854-873, November. [Downloadable!] (restricted)
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  13. Haurin, Donald R. & Brasington, David, 1996. "School Quality and Real House Prices: Inter- and Intrametropolitan Effects," Journal of Housing Economics, Elsevier, vol. 5(4), pages 351-368, December. [Downloadable!] (restricted)
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  15. Bogart, William T. & Cromwell, Brian A., 2000. "How Much Is a Neighborhood School Worth?," Journal of Urban Economics, Elsevier, vol. 47(2), pages 280-305, March. [Downloadable!] (restricted)
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  28. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation Of Elementary Education," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 577-599, May. [Downloadable!] (restricted)
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  29. Kathy J. Hayes & Lori L. Taylor, 1996. "Neighborhood school characteristics: what signals quality to homebuyers?," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q IV, pages 2-9. [Downloadable!]
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Eric J. Brunner & Jennifer Imazeki, 2006. "Tiebout Choice and the Voucher," Working papers 2006-10, University of Connecticut, Department of Economics. [Downloadable!]
  2. Stephen L. Ross, 2008. "Understanding Racial Segregation: What is known about the Effect of Housing Discrimination," Working papers 2008-15, University of Connecticut, Department of Economics, revised Nov 2008. [Downloadable!]
  3. John Yinger, 2009. "Hedonic Markets and Explicit Demands: Bid-Function Envelopes for Public Services, Neighborhood Amenities, and Commuting Costs," Center for Policy Research Working Papers 114, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
  4. Jon H. Fiva & Lars J. Kirkebøen, 2008. "Does the Housing Market React to New Information on School Quality?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  5. Stephen Gibbons & Stephen Machin & Olmo Silva, 2009. "Valuing School Quality Using Boundary Discontinuities," SERC Discussion Papers 0018, Spatial Economics Research Centre, LSE. [Downloadable!]
  6. Stephen L. Ross, 2005. "Commentary on "Exogenous shocks and the dynamics of city growth: evidence from New York"," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 75-77. [Downloadable!]
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