Which New Yorkers vote with their wallets? The impact of teacher quality data on household sorting, and residential and school demographics

Abstract

This paper examines the relationship between the February 2012 New York City teacher quality data release, the racial and ethnic composition of elementary and middle public schools and their neighborhoods, and housing prices. A unique dataset that links teacher quality to school characteristics, housing prices and characteristics, and Census data is used to estimate a difference-in-difference model to estimate the impact of the teacher quality release on housing prices. These results are then used to estimate the impact of the data release on residential and school demographics. The results in this study provide the first evidence of the effects of teacher quality measures on the housing market in New York City and the demographic shifts in residential and school mobility patterns as a result. The data suggests that the housing market responds significantly to the new information that was provided by the release of the teacher quality information, even when taking into consideration the school grades and other variables that may influence teacher quality measures. The magnitude of how much housing prices increase is greatly impacted by certain neighborhood demographics and the results show that Hispanic neighborhoods with a high proportion of free and reduced price lunch students are among the neighborhoods that had the highest increase in housing prices due to the teacher quality release. Not only that, but the areas that had the highest increase in housing prices due to the teacher quality release have experienced increases in the proportion of white students and the neighborhoods are becoming more racially diverse.