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School choice through relocation: evidence from the Washington, D.C. area

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  • Lisa Barrow

Abstract

In this paper I show how the monetary value that parents place on school quality may be inferred from their choice of residential location. The method identifies the valuation that parents place on school quality from the differential effect that measures of school quality have on the residential choices of households with and without children. I implement the method with data from the U.S. Census for Washington, D.C. using residential location decisions in 1990. For whites I find that school quality is an important determinant of residential choices and that households with children in the top income quintile are willing to pay $3,300 for schools that generate a 100 SAT point advantage. The evidence does not indicate that the choices of African Americans are influenced by school quality, which suggests that this group may be constrained in their location choices.

Suggested Citation

  • Lisa Barrow, 1999. "School choice through relocation: evidence from the Washington, D.C. area," Working Paper Series WP-99-7, Federal Reserve Bank of Chicago.
  • Handle: RePEc:fip:fedhwp:wp-99-7
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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, Oxford University Press, vol. 114(2), pages 577-599.
    2. Theodore M. Crone, 1998. "House prices and the quality of public schools: what are we buying?," Business Review, Federal Reserve Bank of Philadelphia, issue Sep, pages 3-14.
    3. Caroline M. Hoxby, 2000. "Does Competition among Public Schools Benefit Students and Taxpayers?," American Economic Review, American Economic Association, vol. 90(5), pages 1209-1238, December.
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    5. 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.
    6. Richard Abel Musgrave, 1939. "The Voluntary Exchange Theory of Public Economy," The Quarterly Journal of Economics, Oxford University Press, vol. 53(2), pages 213-237.
    7. Jin Huem Park, 1994. "Estimation of Sheepskin Effects and Returns to Schooling Using he Old and the New CPS Measures of Educational Attainment," Working Papers 717, Princeton University, Department of Economics, Industrial Relations Section..
    8. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
    9. Daniel McFadden, 1977. "Modelling the Choice of Residential Location," Cowles Foundation Discussion Papers 477, Cowles Foundation for Research in Economics, Yale University.
    10. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    11. Cecilia Elena Rouse, 1998. "Private School Vouchers and Student Achievement: An Evaluation of the Milwaukee Parental Choice Program," The Quarterly Journal of Economics, Oxford University Press, vol. 113(2), pages 553-602.
    12. 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.
    13. Jin Huem Park, 1994. "Estimation of Sheepskin Effects and Returns to Schooling Using he Old and the New CPS Measures of Educational Attainment," Working Papers 717, Princeton University, Department of Economics, Industrial Relations Section..
    14. Page Marianne, 1995. "Racial and Ethnic Discrimination in Urban Housing Markets: Evidence from a Recent Audit Study," Journal of Urban Economics, Elsevier, vol. 38(2), pages 183-206, September.
    15. Daniel McFadden, 1996. "Computing Willingness-to-Pay in Random Utility Models," Working Papers _011, University of California at Berkeley, Econometrics Laboratory Software Archive.
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    More about this item

    Keywords

    Education ; Washington (D.C.);

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • H1 - Public Economics - - Structure and Scope of Government

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