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Too Late to Buy a Home? School Redistricting and the Timing and Extent of Capitalization

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  • Xiaozhou Ding
  • Christopher Bollinger
  • Michael Clark
  • William H. Hoyt

Abstract

In the past fifty years, a voluminous literature estimating the value of schools through capitalization in home prices has emerged. Prior research has identified capitalization using a variety of approaches including discontinuities caused by boundaries. Here, we use changes in school boundaries and the opening of a new school to identify this capitalization. Critical to properly estimating the effect of redistricting is to account for when information on the rezoning is available. We treat the information about the effects of zoning as occurring in three stages: announcement, approval of the zoning plan (map) and implementation. We find significant changes in values for homes redistricted to or from lower-performing schools and we find that this capitalization occurs well before implementation of the redistricting. As we show, failure to account for capitalization occurring before implementation will attenuate and even change the sign of capitalization.

Suggested Citation

  • Xiaozhou Ding & Christopher Bollinger & Michael Clark & William H. Hoyt, 2022. "Too Late to Buy a Home? School Redistricting and the Timing and Extent of Capitalization," CESifo Working Paper Series 9647, CESifo.
    • Handle: RePEc:ces:ceswps:_9647
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    Cited by:

    1. Xiaozhou Ding & Christopher Bollinger & Michael Clark & William Hoyt & William H. Hoyt, 2023. "Estimation of Welfare Effects in Hedonic Difference-in-Differences: The Case in School Redistricting," CESifo Working Paper Series 10670, CESifo.

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    More about this item

    Keywords

    property values; hedonics; school quality; school district; difference-in-differences;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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