School Choice Programs: The Impacts on Housing Values

28 Pages Posted: 17 Dec 2014

See all articles by Bartley R. Danielsen

Bartley R. Danielsen

North Carolina State University - Poole College of Management

Joshua Fairbanks

Texas Tech University - Rawls College of Business

Jing Zhao

Portland State University - The School of Business

Date Written: December 16, 2014

Abstract

We review both the theoretical and empirical literature relating to the impact of school choice programs, particularly voucher programs, on residential property values. Beginning with the seminal works of Charles Tiebout (1956) and Thomas Nechyba (1999, 2000, 2003), we describe the sorting equilibrium theories that arise in the context of public school assignments based strictly on geographic catchment areas. We then consider the implications of allowing students to attend schools other than those to which they are assigned, particularly in a school voucher context. Finally, we review the empirical tests of these theories to date. The important concepts addressed in this paper are: 1) assigned schools lead to a separating equilibrium that results in segregation on the basis of income, school quality and property values; 2) school choice programs undermine this separating equilibrium by severing the link between place of residence and school assignment.

Keywords: Housing Markets, Property Values, School Choice, Tuition Vouchers, Migration

JEL Classification: H42, I22, I28, R21, R23, H75

Suggested Citation

Danielsen, Bartley R. and Fairbanks, Joshua and Zhao, Jing, School Choice Programs: The Impacts on Housing Values (December 16, 2014). Journal of Real Estate Literature, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2539242

Bartley R. Danielsen

North Carolina State University - Poole College of Management ( email )

Hillsborough Street
Raleigh, NC 27695-8614
United States
919-513-3003 (Phone)

Joshua Fairbanks (Contact Author)

Texas Tech University - Rawls College of Business ( email )

Lubbock, TX 79409
United States
806.834.7687 (Phone)

Jing Zhao

Portland State University - The School of Business ( email )

631 SW Harrison St.
Portland, OR 97201
United States

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