Educational Outcomes and House Values: A Test of the value added Approach
We use house price hedonics to compare the extent that homeowners value traditional measures of school quality or the "value added" of schooling. Unlike other studies, we use spatial statistics as an identification strategy. Based on our study of 310 school districts and 77,000 house transactions, we find little support for the value added model. Instead, we find that households consistently value a district's average proficiency test scores and expenditures. The elasticity of house prices with respect to school expenditures is 0.49, and an increase in test scores by one standard deviation, ceteris paribus, raises house prices by 7.1 percent. Copyright Blackwell Publishers, 2006
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 46 (2006)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-4146|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0022-4146|
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.:
- Gomes-Neto, Joao Batista & Hanushek, Eric A. & Leite, Raimundo Helio & Frota-Bezzera, Roberto Claudio, 1997.
"Health and schooling: Evidence and policy implications for developing countries,"
Economics of Education Review,
Elsevier, vol. 16(3), pages 271-282, June.
- Batista Gomes, J. & Hanushek, E.A. & Helio Leite, R., 1992. "Health and Schooling: Evidence and Policy Implications for Developping Countries," RCER Working Papers 306, University of Rochester - Center for Economic Research (RCER).
- Cheshire, Paul & Sheppard, Stephen, 2002.
"The welfare economics of land use planning,"
Journal of Urban Economics,
Elsevier, vol. 52(2), pages 242-269, September.
- 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.
- David M. Brasington, 1999. "Which Measures of School Quality Does the Housing Market Value?," Journal of Real Estate Research, American Real Estate Society, vol. 18(3), pages 395-414.
- 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.
- Sandra E. Black, 1997. "Do better schools matter? Parental valuation of elementary education," Research Paper 9729, Federal Reserve Bank of New York.
- Julian R. Betts & Darlene Morell, 1999. "The Determinants of Undergraduate Grade Point Average: The Relative Importance of Family Background, High School Resources, and Peer Group Effects," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 268-293.
- John Ries & Tsur Somerville, 2010. "School Quality and Residential Property Values: Evidence from Vancouver Rezoning," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 928-944, November.
- LeSage, James P., 1997. "Regression Analysis of Spatial Data," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 27(2).
- David M. Brasington, 2002. "The Demand for Local Public Goods: The Case of Public School Quality," Public Finance Review, , vol. 30(3), pages 163-187, May.
- Abbigail Chiodo & Rubén Hernández-Murillo & Michael T. Owyang, 2005.
"Nonlinear hedonics and the search for school district quality,"
2003-039, Federal Reserve Bank of St. Louis.
- Michael T. Owyang & Abbigail J Chiodo & Ruben Hernandez-Murillo, 2004. "Nonlinear Hedonics and the Search for School District Quality," Econometric Society 2004 North American Summer Meetings 276, Econometric Society.
- David Brasington, 2002. "Differences in the Production of Education Across Regions and Urban and Rural Areas," Regional Studies, Taylor & Francis Journals, vol. 36(2), pages 137-145.
- H. Spencer Banzhaf & Randall Walsh, 1999. "The Role of Optimizing Behavior in Willingness-to-Pay Estimates for Air Quality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1112-1117.
- Pace, R Kelley & Barry, Ronald & Sirmans, C F, 1998.
"Spatial Statistics and Real Estate,"
The Journal of Real Estate Finance and Economics,
Springer, vol. 17(1), pages 5-13, July.
- Oates, Wallace E, 1969. "The Effects of Property Taxes and Local Public Spending on Property Values: An Empirical Study of Tax Capitalization and the Tiebout Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 77(6), pages 957-71, Nov./Dec..
- 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.
- Summers, Anita A & Wolfe, Barbara L, 1977. "Do Schools Make a Difference?," American Economic Review, American Economic Association, vol. 67(4), pages 639-52, September.
- Meyer, Robert H., 1997. "Value-added indicators of school performance: A primer," Economics of Education Review, Elsevier, vol. 16(3), pages 283-301, June.
- Eric A. Hanushek & Lori L. Taylor, 1990. "Alternative Assessments of the Performance of Schools: Measurement of State Variations in Achievement," Journal of Human Resources, University of Wisconsin Press, vol. 25(2), pages 179-201.
- Brasington, David M., 2002. "Edge versus center: finding common ground in the capitalization debate," Journal of Urban Economics, Elsevier, vol. 52(3), pages 524-541, November.
- David Brasington & D. Hite, .
"Demand for Environmental Quality: A Spatial Hedonic Analysis,"
Departmental Working Papers
2003-02, Department of Economics, Louisiana State University.
- Brasington, David M. & Hite, Diane, 2005. "Demand for environmental quality: a spatial hedonic analysis," Regional Science and Urban Economics, Elsevier, vol. 35(1), pages 57-82, January.
- Cushing, Brian J., 1984. "Capitalization of interjurisdictional fiscal differentials: An alternative approach," Journal of Urban Economics, Elsevier, vol. 15(3), pages 317-326, May.
- Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
- Hanushek, Eric A, 1992. "The Trade-Off between Child Quantity and Quality," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 84-117, February.
- 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.
- Hanushek, E.A.omson, W., 1996. "Assessing the Effects of School Resources on Student Performance : An Update," RCER Working Papers 424, University of Rochester - Center for Economic Research (RCER).
- Bolduc, Denis & Laferriere, Richard & Santarossa, Gino, 1992. "Spatial autoregressive error components in travel flow models," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 371-385, September.
- Dills Angela K., 2004. "Do Parents Value Changes in Test Scores? High Stakes Testing in Texas," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-34, August.
- Rosen, Harvey S & Fullerton, David J, 1977. "A Note on Local Tax Rates, Public Benefit Levels, and Property Values," Journal of Political Economy, University of Chicago Press, vol. 85(2), pages 433-40, April.
- Figlio, David N., 1999. "Functional form and the estimated effects of school resources," Economics of Education Review, Elsevier, vol. 18(2), pages 241-252, April.
- Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-77, September.
- Hunt-McCool, Janet & Bishop, Dawn M., 1998. "Health economics and the economics of education: specialization and division of labor," Economics of Education Review, Elsevier, vol. 17(3), pages 237-244, June.
- Kelley Pace, R., 1997. "Performing large spatial regressions and autoregressions," Economics Letters, Elsevier, vol. 54(3), pages 283-291, July.
- David M. Brasington, 2000. "Demand and Supply of Public School Quality in Metropolitan Areas: The Role of Private Schools," Journal of Regional Science, Wiley Blackwell, vol. 40(3), pages 583-605.
- Christian A. L. Hilber & Christopher J. Mayer, . "Land Supply, House Price Capitalization, and Local Spending on Schools," Zell/Lurie Center Working Papers 392, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
- 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.
- 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.
- Goodman, Allen C. & Thibodeau, Thomas G., 1998. "Housing Market Segmentation," Journal of Housing Economics, Elsevier, vol. 7(2), pages 121-143, June.
When requesting a correction, please mention this item's handle: RePEc:bla:jregsc:v:46:y:2006:i:2:p:245-268. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.