House Prices and School Quality: Instruments, Signaling, Usage and Perceptions

David M. Brasington
2016 Sociology and Anthropology  
We identify commonly-available instrumental variables for housing hedonics for proficiency tests, school spending, and property taxes. We estimate the hedonic simultaneously with the reasons a person bought his house. We find larger housing value elasticities than previous studies: 0.47 for test scores, 1.07 for expenditures per pupil, and -0.37 for property taxes. We suggest schooling expenditures acts as a signaling mechanism. We find that people who use private schools and think their
more » ... school is excellent pay an additional 10% house price premium; this finding, along with capitalization of private school test scores, supports the theory of the marginal consumer.
doi:10.13189/sa.2016.040709 fatcat:53s3tpo7pvabhmkvna4s3oz72a