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What's in a Grade? School Report Cards and the Housing Market

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  • David N. Figlio
  • Maurice E. Lucas

Abstract

This paper investigates whether the housing market responds to the information incorporated in state-administered school grades. We study whether school grades affect families' residential locations and house prices. Using detailed data on repeated sales of individual residential properties in the state of Florida, we find evidence that there is an independent effect of these grades on house prices and residential location, above and beyond the estimated effects of test scores and the other components of the school grades. Because these grades have a large stochastic component, however, we find that over time the estimated effects of the grades has diminished.

Suggested Citation

  • David N. Figlio & Maurice E. Lucas, 2004. "What's in a Grade? School Report Cards and the Housing Market," American Economic Review, American Economic Association, vol. 94(3), pages 591-604, June.
    • Handle: RePEc:aea:aecrev:v:94:y:2004:i:3:p:591-604
    Note: DOI: 10.1257/0002828041464489
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    References listed on IDEAS

    as
    1. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(2), pages 577-599.
    2. 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.
    3. Bogart, William T. & Cromwell, Brian A., 1997. "How Much More is a Good School District Worth?," National Tax Journal, National Tax Association, vol. 50(2), pages 215-32, June.
    4. Bogart, William T. & Cromwell, Brian A., 1997. "How Much More Is a Good School District Worth?," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(2), pages 215-232, June.
    5. David N. Figlio & Marianne E. Page, 2003. "Can School Choice and School Accountability Successfully Coexist?," NBER Chapters, in: The Economics of School Choice, pages 49-66, National Bureau of Economic Research, Inc.
    6. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    7. Bradbury, Katharine L. & Mayer, Christopher J. & Case, Karl E., 2001. "Property tax limits, local fiscal behavior, and property values: evidence from Massachusetts under Proposition," Journal of Public Economics, Elsevier, vol. 80(2), pages 287-311, May.
    8. David N. Figlio & Maurice E. Lucas, 2000. "What's in a Grade? School Report Cards and House Prices," NBER Working Papers 8019, National Bureau of Economic Research, Inc.
    9. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-338, May.
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