The Demand for Educational Quality: Combining a Median Voter and Hedonic House Price Model

21 Pages Posted: 22 Apr 2006

See all articles by David M. Brasington

David M. Brasington

University of Cincinnati - Department of Economics

Donald R. Haurin

Ohio State University (OSU) - Economics

Date Written: April 15, 2006

Abstract

Communities differ in both the bundle of amenities offered to residents and the implicit price of these amenities. Thus, households are faced with a choice of which bundle to select when they select their residence. This choice implies households make tradeoffs among the amenities; that is, the amenities are substitutes or complements. We focus on estimating the demand for one of the most important amenities - public school quality. We use transaction prices from the housing market and the hedonic house price model to generate the implicit prices of community amenities. The median voter model is used to estimate the income and price elasticities of demand for educational quality. We find that the own price elasticity of demand for schooling is about -0.5 and the income elasticity of demand is about 0.5. New findings include estimates of a set of cross-price elasticities of demand for school quality. We find that a community's income level, percentage white households, and level of public safety are substitutes for school quality.

Keywords: hedonic demand, housing,public schooling quality,public good consumption

JEL Classification: H40, I20, R22

Suggested Citation

Brasington, David M. and Haurin, Donald R., The Demand for Educational Quality: Combining a Median Voter and Hedonic House Price Model (April 15, 2006). Available at SSRN: https://ssrn.com/abstract=897323 or http://dx.doi.org/10.2139/ssrn.897323

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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