Effect of a School Finance Reform on Housing Stock and Residential Segregation: Evidence from Proposal A in Michigan
AbstractLocal financing of public schools in the U.S. leads to a bundling of two distinct choices - residential choice and school choice - and increases the degree of socioeconomic segregation across school districts. A school finance reform can go a long way in weakening this link. In this paper I study the Michigan school finance reform of 1994 (Proposal A) which resulted in a comprehensive equalization of per pupil expenditures. Using panel data on Michigan K-12 districts and data from the decennial censuses I investigate whether the reform had any significant effects on spatial segregation. I find that Proposal A has been responsible for increases in housing stock and property values in the lowest spending school districts, and for improvements in several socioeconomic indicators, implying a decline is neighborhood sorting. However, there is continued high demand for residence in the highest spending communities, which points to the importance of neighborhood peer effects (‘local’ social capital).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by EconWPA in its series Public Economics with number 0412004.
Length: 44 pages
Date of creation: 05 Dec 2004
Date of revision:
Note: Type of Document - pdf; pages: 44
Contact details of provider:
Web page: http://22.214.171.124
School finance reform; spatial segregation; Tiebout sorting; peer effects.;
Find related papers by JEL classification:
- I2 - Health, Education, and Welfare - - Education
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-12-12 (All new papers)
- NEP-EDU-2004-12-12 (Education)
- NEP-GEO-2004-12-12 (Economic Geography)
- NEP-URE-2004-12-12 (Urban & Real Estate Economics)
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.:
- Sandra E. Black, 1997.
"Do better schools matter? Parental valuation of elementary education,"
9729, Federal Reserve Bank of New York.
- 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.
- Feldstein, Martin S, 1975. "Wealth Neutrality and Local Choice in Public Education," American Economic Review, American Economic Association, vol. 65(1), pages 75-89, March.
- Fernandez, Raquel & Rogerson, Richard, 1996. "Income Distribution, Communities, and the Quality of Public Education," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 135-64, February.
- Benabou, R., 1992.
"Heterogeneity, Stratification, and Growth,"
93-4, Massachusetts Institute of Technology (MIT), Department of Economics.
- Loeb, Susanna, 2001. "Estimating the effects of school finance reform: a framework for a federalist system," Journal of Public Economics, Elsevier, vol. 80(2), pages 225-247, May.
- Lisa Barrow, 1999.
"School choice through relocation: evidence from the Washington, D.C. area,"
Working Paper Series
WP-99-7, Federal Reserve Bank of Chicago.
- Barrow, Lisa, 2002. "School choice through relocation: evidence from the Washington, D.C. area," Journal of Public Economics, Elsevier, vol. 86(2), pages 155-189, November.
- Westhoff, Frank, 1977. "Existence of equilibria in economies with a local public good," Journal of Economic Theory, Elsevier, vol. 14(1), pages 84-112, February.
- Downes, Thomas A., 1992. "Evaluating the Impact of School Finance Reform on the Provision of Public Education: The California Case," National Tax Journal, National Tax Association, vol. 45(4), pages 405-19, December .
- Aaronson, Daniel, 1999.
"The Effect of School Finance Reform on Population Heterogeneity,"
National Tax Journal,
National Tax Association, vol. 52(n. 1), pages 5-29, March Cit.
- Daniel Aaronson, 1998. "The effect of school finance reform on population heterogeneity," Working Paper Series WP-98-11, Federal Reserve Bank of Chicago.
- Bewley, Truman F, 1981. "A Critique of Tiebout's Theory of Local Public Expenditures," Econometrica, Econometric Society, vol. 49(3), pages 713-40, May.
- Thomas Downes, 2003. "School Finance Reform and School Quality: Lessons from Vermont," Discussion Papers Series, Department of Economics, Tufts University 0309, Department of Economics, Tufts University.
- Dee, Thomas S, 2000. "The Capitalization of Education Finance Reforms," Journal of Law and Economics, University of Chicago Press, vol. 43(1), pages 185-214, April.
- Murray, Sheila E & Evans, William N & Schwab, Robert M, 1998. "Education-Finance Reform and the Distribution of Education Resources," American Economic Review, American Economic Association, vol. 88(4), pages 789-812, September.
- Joydeep Roy, 2004. "Impact of School Finance Reform on Resource Equalization and Academic Performance: Evidence from Michigan," Econometric Society 2004 North American Summer Meetings 425, Econometric Society.
- Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
- de Bartolome, Charles A M, 1990. "Equilibrium and Inefficiency in a Community Model with Peer Group Effects," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 110-33, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).
If references are entirely missing, you can add them using this form.