The Housing Costs Associated with School Quality in the United States, 2009-2018

Abstract

In discussions of the barriers faced by the poor to accessing high-quality K-12 education, housing costs figure prominently. A common view is that housing costs more in school zones with higher quality schools. But is this view accurate? And if so, how much more does it cost? We investigate this question by relating two test-based school-level measures of educational quality, standardized test score levels and rates of student learning, with housing cost measures around the school based on homeownership, renting, or both. Our work contributes the first nationwide estimates of this relationship for rates of student learning, and to date the most comprehensive nationwide examination these associations for the levels of test scores. Using a model of choice, we justify our correlational analysis as reflecting the school quality cost curve faced by a household that strongly desires school quality at the expense of other amenities. We find that test score levels are strongly positively related to housing costs, and in particular exhibit a strongly convex (concave up) relationship when levels are measured in the conventional metric of student population standard deviations. Growth rates are significantly and approximately linearly positively associated with housing costs. We further examine the policy moderators of commuting zone average zoning restrictiveness and school choice intensity, finding that the cost curves are especially steeper in commuting zones with highly restrictive zoning. Finally, we compare our associations to the hedonics literature that estimates the effects of school quality on housing prices.