Unawareness and Selective Disclosure: The Effect of School Quality Information on Property Prices

37 Pages Posted: 27 Dec 2016

See all articles by John P. Haisken-DeNew

John P. Haisken-DeNew

University of Melbourne - Melbourne Institute of Applied Economic and Social Research; McMaster University, Faculty of Social Sciences, Department of Economics

Syed Hasan

Massey University - School of Economics and Finance

Nikhil Jha

Melbourne Institute of Applied Economic and Social Research

Mathias Sinning

Australian National University (ANU) - Crawford School of Public Policy

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Abstract

The Australian Government launched the My School website in 2010 to provide standardised information about the quality of schools to the Australian public. This paper combines data from this website with home sales data for the state of Victoria to estimate the effect of the publication of school quality information on property prices. We use a difference-in-difference approach to estimate the causal effect of the release of information about high-quality and low-quality schools relative to medium-quality schools in the neighborhood and find that the release of information about high-quality schools increases property prices by 3.6 percent, whereas the release of information about low-quality schools has no significant effect. The findings indicate that many buyers are unaware of the relevance of school quality information and that real estate agents pursue a strategy of disclosing information about high-quality schools to increase the sales price. Results from a survey of Victorian real estate agents provide evidence in favor of this strategy.

Keywords: school quality, housing markets, information asymmetry, public policy evaluation, difference-in-difference estimation

JEL Classification: D82, D84, I24, R31

Suggested Citation

Haisken-DeNew, John P. and Hasan, Syed and Jha, Nikhil and Sinning, Mathias, Unawareness and Selective Disclosure: The Effect of School Quality Information on Property Prices. IZA Discussion Paper No. 10434. Available at SSRN: https://ssrn.com/abstract=2889680

John P. Haisken-DeNew (Contact Author)

University of Melbourne - Melbourne Institute of Applied Economic and Social Research

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

McMaster University, Faculty of Social Sciences, Department of Economics ( email )

1280 Main Street West
Hamilton, Ontario L8S 4M4
Canada

Syed Hasan

Massey University - School of Economics and Finance ( email )

Private Bag 11-222
Palmerston North, 30974
New Zealand

Nikhil Jha

Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
161 Barry Street
Carlton, VIC 3053
Australia

Mathias Sinning

Australian National University (ANU) - Crawford School of Public Policy ( email )

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

HOME PAGE: http://www.mathiassinning.com

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