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Does the market value value-added? Evidence from housing prices after a public release of school and teacher value-added

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  • Imberman, Scott A.
  • Lovenheim, Michael F.

Abstract

Value-added data have become an increasingly common evaluation tool for schools and teachers. Many school districts have begun to adopt these methods and have released results publicly. In this paper, we use the unique public release of value-added data in Los Angeles to identify how this measure of school quality is capitalized into housing prices. Via difference-in-differences, we find no evidence of a response to either school or teacher value-added rank, even though school-zone boundary fixed-effects estimates indicate that test score levels are capitalized into home prices. Given ample evidence that this information was new to residents, widely dispersed, and easily available, our results suggest that people did not significantly value it on the margin. This has implications for the effectiveness of providing value-added information as a tool to help parents choose schools.

Suggested Citation

  • Imberman, Scott A. & Lovenheim, Michael F., 2016. "Does the market value value-added? Evidence from housing prices after a public release of school and teacher value-added," Journal of Urban Economics, Elsevier, vol. 91(C), pages 104-121.
  • Handle: RePEc:eee:juecon:v:91:y:2016:i:c:p:104-121
    DOI: 10.1016/j.jue.2015.06.001
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    References listed on IDEAS

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    Cited by:

    1. Haisken-DeNew, John & Hasan, Syed & Jha, Nikhil & Sinning, Mathias, 2018. "Unawareness and selective disclosure: The effect of school quality information on property prices," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 449-464.
    2. Mike Gilraine & Hugh Macartney & Rob McMillan, 2018. "Education Reform in General Equilibrium: Evidence from California’s Class Size Reduction," Working Papers tecipa-594, University of Toronto, Department of Economics.
    3. Stacy, Brian, 2014. "Ranking Teachers when Teacher Value-Added is Heterogeneous Across Students," EconStor Preprints 104743, ZBW - German National Library of Economics.
    4. Steven Glazerman & Dallas Dotter, "undated". "Market Signals: Evidence on the Determinants and Consequences of School Choice from a Citywide Lottery," Mathematica Policy Research Reports fb9c3ca046294636aa526d7c1, Mathematica Policy Research.
    5. Margaret Brehm & Scott A. Imberman & Michael Naretta, 2017. "Capitalization of Charter Schools into Residential Property Values," Education Finance and Policy, MIT Press, vol. 12(1), pages 1-27, Winter.
    6. Anna Salomons & Maarten Goos, 2014. "Measuring Teaching Quality in Higher Education : Assessing the Problem of Selection Bias in Course Evaluations," Working Papers 14-16, Utrecht School of Economics.
    7. Peter Leopold S. Bergman & Matthew J. Hill, 2015. "The Effects of Making Performance Information Public: Evidence from Los Angeles Teachers and a Regression Discontinuity Design," CESifo Working Paper Series 5383, CESifo Group Munich.
    8. Nirav Mehta, 2014. "Targeting the Wrong Teachers: Estimating Teacher Quality for Use in Accountability Regimes," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20143, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).

    More about this item

    Keywords

    Value-added; Housing prices; School quality capitalization; Education;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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