Capitalization of School Quality in Housing Prices: Evidence from Boundary Changes in Shelby County, Tennessee
Courtney A. Collins, Erin K. Kaplan
American Economic Review · 2017 · Volume 107 · Issue 5
Abstract
In 2013 Memphis City Schools and Shelby County Schools consolidated into a unified system, creating one of the largest districts in the nation. Six Memphis suburbs subsequently voted to create separate municipal districts. Many school zoning changes resulted from the merger and subsequent splintering of districts, providing a rare opportunity to separately identify the value of both school and district quality as they are capitalized in housing prices. Utilizing school fixed effects and repeat sales data, we find that a one standard deviation increase in test scores increases prices by 3-4% while district administration accounts for 5-8% of home values.
Keywords
State and Local Government: Health, Education, Welfare, Public Pensions, Analysis of Education, Education: Government Policy, Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration, Regional Labor Markets, Population, Neighborhood Characteristics, Housing Supply and Markets
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