David M. Brasington

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

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%.

Joint Provision of Public Goods: The Consolidation of School Districts

Using Ohio metropolitan school districts, I test the factorsthat cause and inhibit political jurisdictions from jointlyproviding public services. The Poirier bivariate probitanalysis suggests that economies of scale factors are moreimportant than socio-demographic factors in determiningwhether two entities will form a joint school district.Small, property-poor districts merge, while large, property-rich districts tend not to merge. The results furthersuggest that high-income communities have relatively littleapprehension about consolidating school districts with otherhigh income communities, but that a large gap in incomebetween neighboring communities makes joint school districtformation less likely.

Edge Versus Center: Finding Common Ground in the Capitalization Debate

A continuing debate questions whether capitalization of taxes and public services into house price occurs. The current study argues for an inverse relationship between housing supply elasticity and capitalization rates. A sample is split into houses on the interior and edge of the urban area. Capitalization of schooling and crime occurs everywhere, but it is weaker toward the edge of an urban area where housing supply elasticities and developer activity are greater. Tax results are less robust, but the capitalization rates of crime and school quality are roughly twice as strong on the interior than on the urban fringe.

Demand and Supply of Public School Quality in Metropolitan Areas: The Role of Private Schools

In this paper I investigate the role of private schools in the housing market and in the supply and demand for public schooling. I estimate public school-quality supply simultaneously with demand, which provides greater confidence in calculated demand elasticities than in single-equation studies. The price of public schools, private schools, and taxes all appear in the demand estimation and have elasticities of @ndash;0.19, 0.11, and -0.49, respectively. Public school-quality supply is responsive to private-school competition but not to competition from other public schools. The percentage of school-aged children attending private schools depresses house values holding public-schooling outcomes constant. Copyright 2000 Blackwell Publishers

The Demand for Local Public Goods: The Case of Public School Quality:

The demand for public school quality is estimated. Unlike previous studies, the price of a unit of public school quality in the demand estimation is measured by both the tax price and the implicit price calculated from a house price hedonic. Identification, endogeneity, and Tiebout bias are addressed. The tax price elasticity of the demand for public schooling is -.17; the implicit price elasticity of demand is -.11. Both estimates are more inelastic than previously reported elasticities. The income elasticity of demand is .32. The positive relationship between constant-quality house price and public school quality is confirmed.

Snobbery, Racism, or Mutual Distaste: What Promotes and Hinders Cooperation in Local Public Good Provision?

A political jurisdiction may decide to cooperate in public schooling provision with its neighbors or remain independent. The determinants of the consolidation decision are compared for the richer and the poorer and for the whiter and the less white jurisdiction in each potential consolidation pair. Property values and scale economies matter most. However, poorer jurisdictions prefer merging with richer ones that are less white than themselves. Whiter jurisdictions prefer to consolidate with less white ones of similar income. Less white jurisdictions are more open to consolidation with whiter ones if their incomes differ in either direction. Traditional club-theory predictions are not supported.

House Prices and the Structure of Local Government: An Application of Spatial Statistics

When two internally homogeneous communities decide to jointly provide a public service, residents of each community lose some control over the public service provision. The loss of control over public schooling provision contributes to a

A Mixed Index Approach to Identifying Hedonic Price Models

2,929 or 3.5 percent drop in constant-quality house value. Increased heterogeneity of the consolidated district is responsible for almost all the drop; the increased number of service recipients alone is responsible for almost none of the drop. The spatial hedonic, corrected for sample selection bias, also suggests economies of scale gains from school district consolidation must be worth at least

The Supply of Public School Quality

3,369—4 percent of house value.

School Choice: Supporters and Opponents

Recent literature suggests identifying house price hedonic regressions by using instrumental variables, spatial statistics, the borders approach, panel data, and other techniques. We present an empirical application of a mixed index model, first proposed by Bowden [Bowden, R.J., 1992. Competitive selection and market data: the mixed-index problem. The Review of Economic Studies 59(3):625-633.] to identify hedonic price regressions. We compare the performance of the mixed index model to a traditional hedonic model and to a hedonic model that includes characteristics of the buyer of each house. We find the mixed index model outperforms the other models based on bootstrap distributions of predicted housing values, prediction variance, and predicted policy effects. The mixed index model distributions are less skewed and kurtotic than the other models, suggesting it more closely satisfies the classical linear regression assumption of normally distributed errors. Compared to the mixed index model, the traditional hedonic overstates the importance of lot size and school quality to house price and understates the importance of environmental quality.