Do Better Schools Matter? Parental Valuation of Elementary Education

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Research Papers

Do Better Schools Matter? Parental Valuation of Elementary Education

September 1997 Number 9729

Author: Sandra E. Black

The evaluation of numerous school reforms requires an understanding of the value parents place on school quality. I use house prices to infer this value, where school quality is proxied by elementary school test scores. I do so by looking within school districts at houses located on attendance district boundaries; I am then comparing houses that differ along only one dimension: the elementary school the child attends. I thereby effectively remove the variation in neighborhood characteristics, property tax rates, and school spending. I find that parents are willing to pay 2.5 percent more for a 5 percent increase in test scores; this is approximately half the estimate one gets by running a typical hedonic housing price regression. This estimate is robust to a number of sensitivity checks.

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