School Quality and Real House Prices: Inter- and Intrametropolitan Effects

Abstract This study focuses on explaining variations in real constant-quality house prices in jurisdictions located in multiple MSAs. Using a hedonic house price framework, we test competing theories of house price determination. Using two variants of the random coefficients model, we find that public school quality has a very large impact on real constant-quality house prices. Our results suggest that capitalization of school quality differences occurs on a per lot basis rather than per square foot of land. Also important to the explanation of variations in house prices are variables derived from urban theory, such as distance to the CBD, and from the amenity literature, such as a community's crime rate, arts, and recreational opportunities

[1]  G. Blomquist,et al.  New Estimates of Quality of Life in Urban Areas , 1988 .

[2]  Daniel Richards,et al.  Wage Inflation, Unionization, and Monopoly Power , 1990 .

[3]  David Gillen,et al.  An Extension of the Hedonic Approach for Estimating the Value of Quiet , 1980 .

[4]  Takeshi Amemiya,et al.  A Note on a Random Coefficients Model , 1978 .

[5]  G. D. Jud.  The Effects of Zoning on Single-Family Residential Property Values: Charlotte, North Carolina , 1980 .

[6]  J. Yinger,et al.  Capitalization and the Theory of Local Public Finance , 1982, Journal of Political Economy.

[7]  T. Thibodeau,et al.  Housing Price Indexes from the 1974-1983 SIMSA Annual Housing Surveys , 1989 .

[8]  J. Kushner,et al.  Canadian Inter-City House Price Differentials , 1986 .

[9]  Robert W. Helsley,et al.  The stochastic city , 1990 .

[10]  Larry Ozanne,et al.  Explaining metropolitan housing price differences , 1983 .

[11]  Christin A. Manning.  Intercity Differences in Home Price Appreciation , 1986 .

[12]  Identifying Productivity and Amenity Effects in Interurban Wage Differentials , 1989 .

[13]  W. Oates.  The Effects of Property Taxes and Local Public Spending on Property Values: An Empirical Study of Tax Capitalization and the Tiebout Hypothesis , 1969, Journal of Political Economy.

[14]  Donald R. Haurin,et al.  The Regional Distribution of Population, Migration, and Climate , 1980 .

[15]  S. Rosen.  Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition , 1974, Journal of Political Economy.

[16]  Susan M. Wachter.  The Effects of Land-Use Constraints on Housing Prices , 1990 .

[17]  Intermetropolitan Migration and Housing Prices: Simultaneously Determined? , 1994 .

[18]  G. Blomquist,et al.  Mobility and destination in migration decisions: The roles of earnings, quality of life, and housing prices , 1992 .

[19]  R. Muth,et al.  Cities and Housing. , 1970 .

[20]  James M. Poterba,et al.  House Price Dynamics: The Role of Tax Policy , 1991 .

[21]  Rick Boyer,et al.  Places Rated Almanac: Your Guide to Finding the Best Places to Live in America , 1981 .

[22]  J. Henderson,et al.  Economic theory and the cities , 1977 .

[23]  Christin A. Manning.  Explaining intercity home price differences , 1989 .

[24]  J. Wilcox,et al.  The measurement and determinants of single-family house prices , 1991 .

[25]  P. Graves,et al.  Household migration: theoretical and empirical results. , 1979, Journal of urban economics.

[26]  J. MacKinnon,et al.  Several Tests for Model Specication in the Pres-ence of Alternative Hypotheses , 1981 .

[27]  J. Roback.  Wages, Rents, and the Quality of Life , 1982, Journal of Political Economy.

[28]  P. Hendershott,et al.  Patterns and Determinants of Metropolitan House Prices, 1977-91 , 1992 .

[29]  Mingche M. Li,et al.  Micro-Neighborhood Externalities and Hedonic Housing Prices , 1980 .

[30]  The Baby Boom, the Baby Bust, and the Housing Market , 1989 .

[31]  Jr. Douglas B. Diamond.  The Relationship between Amenities and Urban Land Prices , 1980 .

[32]  Dongwook Kim.  The determinants of urban housing prices in 1982-1990 , 1993 .

[33]  H. Bloom,et al.  Property Taxes and House Values : The Theory and Estimation of Interjurisdictional Tax Capitalization , 1988 .

[34]  D. Haurin,et al.  Net migration, unemployment, and the business cycle. , 1988, Journal of regional science.

[35]  R. Dubin,et al.  Specification of hedonic regressions: Non-nested tests on measures of neighborhood quality , 1990 .

[36]  G. Schwann,et al.  The Asset Approach to Pricing Urban Land: Empirical Evidence , 1989 .

[37]  W. Fischel.  Zoning and the exercise of monopoly power: A reevaluation , 1980 .

[38]  Anthony H. Pascal,et al.  Urban housing markets and residential location , 1982 .

[39]  Louis A. Rose.  Topographical constraints and urban land supply indexes , 1989 .

[40]  Paul R. Portney,et al.  Gross rents and market values: Testing the implications of Tiebout's hypothesis , 1980 .

[41]  G. D. Jud,et al.  Schools and Housing Values , 1981 .

[42]  Robert W. Helsley,et al.  The fundamentals of land prices and urban growth , 1989 .

[43]  A. Goodman.  Capitalization of Property Tax Differentials within and among Municipalities , 1983 .

[44]  P. Hendershott,et al.  Bubbles in Metropolitan Housing Markets , 1994 .

[45]  Jerry R. Jackson,et al.  Intraurban variation in the price of housing , 1979 .

[46]  V. Kerry Smith,et al.  Market segmentation and valuing amenities with hedonic models: The case of hazardous waste sites☆ , 1990 .

[47]  H. Rosen,et al.  A Note on Local Tax Rates, Public Benefit Levels, and Property Values , 1977, Journal of Political Economy.

[48]  Tim R. Sass,et al.  Zoning and hedonic housing price models , 1991 .

[49]  Bruce W. Hamilton.  The Effects of Property Taxes and Local Public Spending on Property Values: A Theoretical Comment , 1976, Journal of Political Economy.

[50]  T. Thibodeau,et al.  The Relationship between Median and Constant Quality House Prices: Implications for Setting FHA Loan Limits , 1990 .

[51]  Bruce W. Hamilton.  Zoning and the exercise of monopoly power , 1978 .