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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
John M. Clapp (University of Connecticut)
Anupam Nanda (University of Connecticut)
Stephen L. Ross (University of Connecticut)

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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 explanatory variables that include school district performance and demographic attributes, such as 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 has a negative effect on housing prices in Connecticut, but mixed evidence concerning the impact of test scores on property values. Evidence is also found to suggest that student test scores 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
Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 2005-26.

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Length: 26 pages
Date of creation: Jul 2005
Date of revision: Jan 2007
Handle: RePEc:uct:uconnp:2005-26

Note: Authors appreciate helpful comments from Donald Haurin, Allen Goodman, David Brasington, Randell Reback, as well as participants at the 2006 American Economics Association Meetings, 2005 Southern Economics Association Meetings, 2004 AREUEA International Meetings, and the 2005 University of Connecticut Seminar Series.
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Postal: University of Connecticut 341 Mansfield Road, Unit 1063 Storrs, CT 06269-1063
Phone: (860) 486-4889
Fax: (860) 486-4463
Web page: http://www.econ.uconn.edu/
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Related research
Keywords: School District Performance; Test Score; Demographics; House Price; Omitted Neighborhood Attributes. Assessed Value model.;

Other versions of this item:

Find related papers by JEL classification:
D1 - Microeconomics - - Household Behavior
D4 - Microeconomics - - Market Structure and Pricing
I2 - Health, Education, and Welfare - - Education
R2 - Urban, Rural, and Regional Economics - - Household Analysis
R5 - Urban, Rural, and Regional Economics - - Regional Government Analysis

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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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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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