Parents, peers, or school inputs: Which components of school outcomes are capitalized into house value?
Previous research has established that people bid more for houses in high-performing school districts. But what is it about school outcomes that drive house prices: the parents, the peers, or the school inputs? We study the extent that house values are affected by each of the components of an education production function. Based on 123 school districts and 26,000 house transactions, we find the primary component of school outcomes that is capitalized into house prices is the amount of parental inputs. In the explanation of variations in house prices, variations in parental characteristics are eight times more important than similar variations in school inputs, and twelve times more important than variations in peer groups. This result suggests that land values in a particular community will be increased more by attention to zoning laws that influence the mix of renters to homeowners and the type of households entering a community compared to investing in additional public school inputs.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: Cincinnati, OH 45221-0371|
Phone: (513) 556-2670
Fax: (513) 556-2669
Web page: http://www.business.uc.edu/economics/
More information through EDIRC
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.:
- 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.
- David Brasington & Donald R. Haurin, 2006.
"Educational Outcomes and House Values: A Test of the value added Approach,"
Journal of Regional Science,
Wiley Blackwell, vol. 46(2), pages 245-268.
- David Brasington & Don Haurin, . "Educational Outcomes and House Values: A Test of the Value-Added Approach," Departmental Working Papers 2005-03, Department of Economics, Louisiana State University.
- David Brasington & D. Haurin, . "Educational Outcomes and House Values: A Test of the Value-Added Approach," Departmental Working Papers 2003-05, Department of Economics, Louisiana State University.
- David N. Figlio, 2002. "Can Public Schools Buy Better-Qualified Teachers?," ILR Review, Cornell University, ILR School, vol. 55(4), pages 686-699, July.
- Kelley Pace, R., 1997. "Performing large spatial regressions and autoregressions," Economics Letters, Elsevier, vol. 54(3), pages 283-291, July.
- 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.
- Florax, Raymond & Folmer, Henk, 1992.
"Specification and estimation of spatial linear regression models : Monte Carlo evaluation of pre-test estimators,"
Regional Science and Urban Economics,
Elsevier, vol. 22(3), pages 405-432, September.
- Florax, R. & Folmer, H., 1991. "Specification and Estimation of Spatial Linear Regression Models: Monte Carlo Evaluation of Pre-Test Estimator," Mansholt Working Papers 1991-4, Wageningen University, Mansholt Graduate School of Social Sciences.
- 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.
- Harry H. Kelejian & Ingmar R. Prucha, 1997.
"A Generalized Spatial Two Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances,"
Electronic Working Papers
97-002, University of Maryland, Department of Economics, revised Aug 1997.
- Kelejian, Harry H & Prucha, Ingmar R, 1998. "A Generalized Spatial Two-Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 99-121, July.
- Anselin, Luc, 2002. "Under the hood Issues in the specification and interpretation of spatial regression models," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 27(3), November.
- Kelley Pace, R. & Barry, Ronald, 1997. "Sparse spatial autoregressions," Statistics & Probability Letters, Elsevier, vol. 33(3), pages 291-297, May.
- 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.
- Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 2001.
"Why Public Schools Lose Teachers,"
NBER Working Papers
8599, National Bureau of Economic Research, Inc.
- Pace, R. Kelley & Barry, Ronald & Gilley, Otis W. & Sirmans, C. F., 2000. "A method for spatial-temporal forecasting with an application to real estate prices," International Journal of Forecasting, Elsevier, vol. 16(2), pages 229-246.
- Anselin, Luc, 2002. "Under the hood : Issues in the specification and interpretation of spatial regression models," Agricultural Economics, Blackwell, vol. 27(3), pages 247-267, 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.
- Hite, Diane & Chern, Wen & Hitzhusen, Fred & Randall, Alan, 2001. "Property-Value Impacts of an Environmental Disamenity: The Case of Landfills," The Journal of Real Estate Finance and Economics, Springer, vol. 22(2-3), pages 185-202, March-May.
- 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.
- Ron W Zimmer & Eugenia F Toma, 2000. "Peer effects in private and public schools across countries," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 19(1), pages 75-92.
- LeSage, James P., 1997. "Regression Analysis of Spatial Data," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 27(2).
- Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, Oxford University Press, vol. 114(2), pages 577-599.
- Henderson, Vernon & Mieszkowski, Peter & Sauvageau, Yvon, 1978. "Peer group effects and educational production functions," Journal of Public Economics, Elsevier, vol. 10(1), pages 97-106, August.
- David M. Brasington, 2002. "The Demand for Local Public Goods: The Case of Public School Quality," Public Finance Review, SAGE Publishing, vol. 30(3), pages 163-187, 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..
- J. Barkley Rosser, 2009. "Introduction," Chapters, in: Handbook of Research on Complexity, chapter 1 Edward Elgar Publishing.
- Cushing, Brian J., 1984. "Capitalization of interjurisdictional fiscal differentials: An alternative approach," Journal of Urban Economics, Elsevier, vol. 15(3), pages 317-326, May.
- Wyckoff, James H., 1984. "The nonexcludable publicness of primary and secondary public education," Journal of Public Economics, Elsevier, vol. 24(3), pages 331-351, August.
When requesting a correction, please mention this item's handle: RePEc:cin:ucecwp:2008-09. 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: (Sourushe Zandvakili)
If references are entirely missing, you can add them using this form.