Schools and Housing Values

A model of housing prices is estimated that includes both school quality and racial composition among the attributes that determine housing value. Data used are from the 1977 tax and sales records of individual parcels of single-family residential property in Charlotte, North Carolina. Using the res...

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Bibliographic Details
Published in:Land economics 1981-08, Vol.57 (3), p.459-470
Main Authors: Jud, G. Donald, Watts, James M.
Format: Article
Language:English
Subjects:
Coefficients
Dwelling value
Effects
Housing
Income elasticity of demand
Local
Market prices
Neighborhood schools
Neighborhoods
Price elasticity
Prices
Property values
Public
Public schools
Quality
Real estate
Regression analysis
Residential buildings
Schools
Single family
Valuation
Variable coefficients
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Summary:A model of housing prices is estimated that includes both school quality and racial composition among the attributes that determine housing value. Data used are from the 1977 tax and sales records of individual parcels of single-family residential property in Charlotte, North Carolina. Using the results of the housing price model, a demand model is estimated for school quality. The findings show that the quality of public schools is an important determinant of residential property values. It is estimated that an increase of one grade level in the achievement level of neighborhood schools is linked with an increase of 5.2% to 6.2% in the value of the average house. In Charlotte, it was found that the racial composition of public schools generally had a negative effect on property values, but this effect was significantly reduced when the influence of differing student achievement levels was controlled. In financial terms, a student achievement increase of one-half grade level was found to be worth $675 per homeowner, or $48 million for the city of Charlotte as a whole.
ISSN:0023-7639
1543-8325
DOI:10.2307/3146025