Educational Outcomes and House Values: A Test of the Value Added Approach

Posted: 12 May 2005

See all articles by David M. Brasington

David M. Brasington

University of Cincinnati - Department of Economics

Donald R. Haurin

Ohio State University (OSU) - Economics

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Abstract

We use house price hedonics to compare the extent that homeowners value traditional measures of school quality or the "value added" of schooling. Unlike other studies, we use spatial statistics as an identification strategy. Based on our study of 310 school districts and 77,000 house transactions, we find little support for the value added model. Instead, we find that households consistently value a district's average proficiency test scores and expenditures. The elasticity of house prices with respect to school expenditures is 0.49 and an increase in test scores by one standard deviation, ceteris paribus, raises house prices by 7.1%.

Keywords: House prices, hedonic model, capitalization, school quality, value added, achievement test scores

JEL Classification: I2, N3, R21, R00

Suggested Citation

Brasington, David M. and Haurin, Donald R., Educational Outcomes and House Values: A Test of the Value Added Approach. Journal of Regional Science, Forthcoming. Available at SSRN: https://ssrn.com/abstract=719803

David M. Brasington (Contact Author)

University of Cincinnati - Department of Economics ( email )

Carl H. Lindner Hall 2925 Campus Green Drive
PO Box 0371
Cincinnati, OH 45221-0211
United States

Donald R. Haurin

Ohio State University (OSU) - Economics ( email )

154 N. Oval Mall
1010G Derby Hall
Columbus, OH 43210-1172
United States
614-292-0482 (Phone)
614-292-9530 (Fax)

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