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School Quality, Neighborhoods and Housing Prices: The Impacts of school Desegregation

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  • Thomas J. Kane
  • Douglas O. Staiger
  • Stephanie K. Riegg

Abstract

We study the relationship between school characteristics and housing prices in Mecklenburg County, North Carolina between 1994 and 2001. During this period, the school district was operating under a court-imposed desegregation order and redrew a number of school boundaries. We use two different sources of variation to disentangle the effect of schools and other neighborhood characteristics: differences in housing prices along assignment zone boundaries and changes in housing prices following the change in school assignments. We find systematic differences in house prices along school boundaries, although the impact of schools is only one-quarter as large as the naive cross-sectional estimates would imply. Moreover, house prices seem to react to changes in school assignments. Part of the impact of school assignments is mediated by subsequent changes in the characteristics of the population living in the school zone.

Suggested Citation

  • Thomas J. Kane & Douglas O. Staiger & Stephanie K. Riegg, 2005. "School Quality, Neighborhoods and Housing Prices: The Impacts of school Desegregation," NBER Working Papers 11347, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:11347
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    References listed on IDEAS

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    Cited by:

    1. Ozhegov, Evgeniy & Kosolapov, Nikita & Pozolotina, Iuliia, 2017. "On dependence between housing value and school characteristics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 47, pages 28-48.
    2. Paul Thorsnes & John W. Reifel, 2007. "Tiebout Dynamics: Neighborhood Response To A Central‐City/Suburban House‐Price Differential," Journal of Regional Science, Wiley Blackwell, vol. 47(4), pages 693-719, October.
    3. Stephen B. Billings & Jonah Rockoff, 2014. "School Segregation, Educational Attainment, and Crime: Evidence from the End of Busing in Charlotte-Mecklenburg," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 435-476.
    4. Carlsen, Fredrik & Langset, Bjørg & Rattsø, Jørn & Stambøl, Lasse, 2009. "Using survey data to study capitalization of local public services," Regional Science and Urban Economics, Elsevier, vol. 39(6), pages 688-695, November.
    5. Theodore M. Crone, 2006. "Capitalization of the quality of local public schools: what do home buyers value?," Working Papers 06-15, Federal Reserve Bank of Philadelphia.
    6. La, Vincent, 2015. "Capitalization of school quality into housing prices: Evidence from Boston Public School district walk zones," Economics Letters, Elsevier, vol. 134(C), pages 102-106.
    7. Gibbons, Stephen & Machin, Stephen & Silva, Olmo, 2013. "Valuing school quality using boundary discontinuities," Journal of Urban Economics, Elsevier, vol. 75(C), pages 15-28.
    8. C. Kirabo Jackson & Elias Bruegmann, 2009. "Teaching Students and Teaching Each Other: The Importance of Peer Learning for Teachers," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 85-108, October.
    9. John Glen & Joseph G. Nellis, 2010. "“The Price You Pay”: The Impact of State-Funded Secondary School Performance on Residential Property Values in England," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 57(4), pages 405-428, December.
    10. Stephen Machin & Kjell G. Salvanes, 2016. "Valuing School Quality via a School Choice Reform," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(1), pages 3-24, January.
    11. Robert Bifulco & Helen F. Ladd & Stephen Ross, 2007. "Public School Choice and Integration: Evidence from Durham, North Carolina," Working papers 2007-41, University of Connecticut, Department of Economics, revised Jun 2008.
    12. Ian Davidoff & Andrew Leigh, 2008. "How Much do Public Schools Really Cost? Estimating the Relationship between House Prices and School Quality," The Economic Record, The Economic Society of Australia, vol. 84(265), pages 193-206, June.
    13. Joëlle Noailly & Suncica Vujic & Ali Aouragh, 2009. "The effects of competition on the quality of primary schools in the Netherlands," CPB Discussion Paper 120.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    14. Yadavalli, Anita P. & Florax, Raymond J.G.M., 2013. "The Effect of School Quality on House Prices: A Meta-Regression Analysis," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151291, Agricultural and Applied Economics Association.
    15. Joëlle Noailly & Suncica Vujic & Ali Aouragh, 2009. "The effects of competition on the quality of primary schools in the Netherlands," CPB Discussion Paper 120, CPB Netherlands Bureau for Economic Policy Analysis.
    16. Stephen Gibbons & Stephen Machin, 2008. "Valuing school quality, better transport, and lower crime: evidence from house prices," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(1), pages 99-119, spring.
    17. Chugunov, D., 2013. "Impact of School Quality and Neighborhoods on Housing Prices in Moscow," Journal of the New Economic Association, New Economic Association, vol. 17(1), pages 87-112.
    18. Doko Tchatoka, Firmin & Varvaris, Vanessa, 2021. "Neighbourhood, school zoning and the housing market: Evidence from New South Wales," Journal of Housing Economics, Elsevier, vol. 54(C).
    19. Lorien Rice & Mark Henderson & Margaret Hunter, 2017. "Neighborhood Priority or Desegregation Plans? A Spatial Analysis of Voting on San Francisco’s Student Assignment System," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 36(6), pages 805-832, December.
    20. C. Kirabo Jackson, 2009. "Student Demographics, Teacher Sorting, and Teacher Quality: Evidence from the End of School Desegregation," Journal of Labor Economics, University of Chicago Press, vol. 27(2), pages 213-256, April.

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    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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