Bidding Wars and The Built Environment: The Omnipresent Effect of School Quality on Housing Markets

83 Pages Posted: 17 Jun 2019 Last revised: 31 Mar 2020

See all articles by Crocker Herbert Liu

Crocker Herbert Liu

Cornell University - School of Hotel Administration

Patrick S. Smith

San Diego State University

Date Written: March 30, 2020

Abstract

We provide new evidence of parental demand for effective schools by exploiting shocks to school quality resulting from the continual unexpected redistricting of school attendance boundaries in Atlanta, Georgia. Using repeat-sales of the same house before and after they were redistricted, we show redistricting houses to more (less) effective schools increases (decreases) demand. Houses that are redistricted to more (less) effective schools are more (less) likely to be involved in a market-driven bidding war. Similarly, undeveloped, redistricted parcels are more (less) likely to be built on. The redistricting process also generates economically significant welfare effects that accrue to existing homeowners.

Keywords: bidding wars, construction, housing demand, housing development, school quality

JEL Classification: H75, I25, R21, R31, R52

Suggested Citation

Liu, Crocker Herbert and Smith, Patrick S., Bidding Wars and The Built Environment: The Omnipresent Effect of School Quality on Housing Markets (March 30, 2020). Available at SSRN: https://ssrn.com/abstract=3400104 or http://dx.doi.org/10.2139/ssrn.3400104

Crocker Herbert Liu

Cornell University - School of Hotel Administration ( email )

435B Statler Hall
Ithaca, NY 14853-6902
United States

Patrick S. Smith (Contact Author)

San Diego State University ( email )

5500 Campanile Drive
San Diego, CA 92182-8236
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
36
Abstract Views
410
PlumX Metrics