Public School Reform, Expectations, and Capitalization: What Signals Quality to Homebuyers?
AbstractThis paper offers new evidence on how housing markets capitalize school quality information. We use school assessment measures and house transaction data from a single school district that is coterminous with a unified city-county local government to examine the effects of two school assignment policy changes. The unusual school district-city-county government structure minimizes property tax rate and public service variation across observations, reducing the source of one problem that plagues many capitalization studies. The school reassignment events reveal direct ties between school quality capitalization and households’ expectations—the latter reflected in private school enrollment and tax referendum voting. Different school performance measures convey different information to home owners. In particular, student test scores do not affect house prices when broader school performance measures are published. Prices respond to measured school improvement, but improvements in a given school are more highly valued than being reassigned to a better school.
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Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 75 (2009)
Issue (Month): 4 (April)
Find related papers by JEL classification:
- H4 - Public Economics - - Publicly Provided Goods
- I2 - Health, Education, and Welfare - - Education
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
- R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
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- Nguyen-Hoang, Phuong & Yinger, John, 2011. "The capitalization of school quality into house values: A review," Journal of Housing Economics, Elsevier, vol. 20(1), pages 30-48, March.
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