Information Shocks and the Dynamics of the Housing Market
28 Pages Posted: 24 Aug 2011
Date Written: September 2011
In this paper, we analyze housing‐market reactions to the release of previously unpublished information on school quality. Using high‐quality housing data, which precisely bracket the timing of the information shock, we investigate housing‐price dynamics within school‐catchment areas. We find a robust short‐term housing‐market reaction to the publication of school‐quality indicators, suggesting that this information was new to the households, and that households are willing to pay for better schools. The publication effect does not seem to be permanent as prices revert to pre‐publication levels after two to three months.
Keywords: Information disclosure, hedonic methods, school quality, housing‐price dynamics, I21, I28, R21, R23
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