Abstract
In the past 50 years, a voluminous literature estimating the value of schools through capitalization in home prices has emerged. Prior research has identified capitalization using a variety of approaches including discontinuities caused by boundaries. Here, we use changes in school boundaries and the opening of a new school in Fayette County (Lexington), Kentucky to identify this capitalization. Critical to properly estimating the effect of redistricting is to account for when information on redistricting is available. We treat the information about the effects of zoning as occurring in three stages: announcement of the intent to open the new high school and redistricting, approval of the specific redistricting plan (map), and implementation (opening of the new high school and actual changes in boundaries). We find significant changes in values for homes redistricted from lower-performing schools and we find that this capitalization occurs well before implementation of the redistricting. As we show, failure to account for capitalization occurring before implementation will attenuate and even change the sign of capitalization.
| Original language | English |
|---|---|
| Pages (from-to) | 207-237 |
| Number of pages | 31 |
| Journal | Journal of Regional Science |
| Volume | 64 |
| Issue number | 1 |
| DOIs | |
| State | Published - Jan 2024 |
Bibliographical note
Publisher Copyright:© 2023 Wiley Periodicals LLC.
Funding
We are grateful for the valuable comments from editor Siqi Zheng and two anonymous reviewers. We thank Spencer Banzhaf, Samuel Ingram, Lala Ma, Rudolf Marty, Alexander McGlothlin, Martin Simmler, Tsur Somerville, Anthony Yezer, Weihua Zhao, and conference and seminar participants at the NARSC Annual Meeting, Kentucky Economic Association Annual Conference, IIPF Annual Congress, SEA Annual Meeting, AREUEA‐ASSA Annual Conference, University of Graz, and Lafayette College for helpful comments and discussions. We thank the support from Dickinson College Dana Research Assistantship and Sarah Mason for research assistance. We also thank Mike Childress, David O'Neill, Fayette County PVA, and Lexington‐Bluegrass Association of Realtors for their help on this project. We are grateful for the valuable comments from editor Siqi Zheng and two anonymous reviewers. We thank Spencer Banzhaf, Samuel Ingram, Lala Ma, Rudolf Marty, Alexander McGlothlin, Martin Simmler, Tsur Somerville, Anthony Yezer, Weihua Zhao, and conference and seminar participants at the NARSC Annual Meeting, Kentucky Economic Association Annual Conference, IIPF Annual Congress, SEA Annual Meeting, AREUEA-ASSA Annual Conference, University of Graz, and Lafayette College for helpful comments and discussions. We thank the support from Dickinson College Dana Research Assistantship and Sarah Mason for research assistance. We also thank Mike Childress, David O'Neill, Fayette County PVA, and Lexington-Bluegrass Association of Realtors for their help on this project.
| Funders | Funder number |
|---|---|
| Dickinson College Dana | |
| Fayette County PVA | |
| Samuel Ingram | |
| Spencer Banzhaf | |
| Lafayette College | |
| Karl-Franzens-Universität Graz |
Keywords
- difference-in-differences
- hedonics
- property values
- school district
- school quality
ASJC Scopus subject areas
- Development
- Environmental Science (miscellaneous)