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House prices and school choice: Evidence from Chicago's magnet schools’ proximity lottery

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  • Leonardo Bonilla‐Mejía
  • Esteban Lopez
  • Daniel McMillen

Abstract

Studies of open school policies predict house prices to rise in areas that gain access to high‐quality schools. However, excess demand may limit access to high‐quality schools. We take advantage of changes in Chicago's schools’ admissions policies to test whether a higher probability of admission to magnet schools for students living within 1.5 miles leads to higher house prices. Results indicate that the 1997 and 2009 reforms increased house prices for homes within the 1.5 mile radius by about 4% and 12.6%, respectively. The higher probability of admission for black students after a consent decree was vacated in 2009 led to a significant increase in prices in predominantly African‐American areas on the south side.

Suggested Citation

  • Leonardo Bonilla‐Mejía & Esteban Lopez & Daniel McMillen, 2020. "House prices and school choice: Evidence from Chicago's magnet schools’ proximity lottery," Journal of Regional Science, Wiley Blackwell, vol. 60(1), pages 33-55, January.
    • Handle: RePEc:bla:jregsc:v:60:y:2020:i:1:p:33-55
    DOI: 10.1111/jors.12447
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    1. Rajapaksa, Darshana & Gono, Marcel & Wilson, Clevo & Managi, Shunsuke & Lee, Boon & Hoang, Viet-Ngu, 2020. "The demand for education: The impacts of good schools on property values in Brisbane, Australia," Land Use Policy, Elsevier, vol. 97(C).
    2. Yi Huang & Sandy Dall’erba, 2021. "Does Proximity to School Still Matter Once Access to Your Preferred School Zone Has Already Been Secured?," The Journal of Real Estate Finance and Economics, Springer, vol. 62(4), pages 548-577, May.
    3. Doko Tchatoka, Firmin & Varvaris, Vanessa, 2021. "Neighbourhood, school zoning and the housing market: Evidence from New South Wales," Journal of Housing Economics, Elsevier, vol. 54(C).
    4. Huang, Bin & He, Xiaoyan & Xu, Lei & Zhu, Yu, 2020. "Elite School Designation and Housing Prices: Quasi-Experimental Evidence from Beijing, China," IZA Discussion Papers 12897, Institute of Labor Economics (IZA).
    5. Pengyu Zhu & Yi Zhang & Juan Wang, 2023. "Canceling the admission priority of private schools enlarges housing price gap in public school districts: Evidence from Shanghai's new admission policy," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(1), pages 49-67, January.
    6. Hanaki, Nobuyuki & Hayashi, Takashi & Lombardi, Michele & Ogawa, Kazuhito, 2021. "Partial equilibrium mechanism and inter-sectoral coordination: An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 366-389.
    7. Xiaozhou Ding & Christopher Bollinger & Michael Clark & William H. Hoyt, 2020. "How Do School District Boundary Changes and New School Proposals Affect Housing Prices," CESifo Working Paper Series 8069, CESifo.
    8. Lang Yang, 2019. "The impact of state intervention and bankruptcy authorization laws on local government deficits," Economics of Governance, Springer, vol. 20(4), pages 305-328, December.
    9. Ding, Kangzhe & Itoh, Ryo, 2023. "JUE Insight: The impact of the school admission restriction policy on the housing market in Shanghai," Journal of Urban Economics, Elsevier, vol. 136(C).
    10. Xiaozhou Ding & Christopher Bollinger & Michael Clark & William H. Hoyt, 2022. "Too Late to Buy a Home? School Redistricting and the Timing and Extent of Capitalization," CESifo Working Paper Series 9647, CESifo.
    11. Angela Stefania Bergantino & Antonella Biscione & Annunziata de Felice & Francesco Porcelli & Riccardo Zagaria, 2022. "Kindergarten Proximity and the Housing Market Price in Italy," Economies, MDPI, vol. 10(9), pages 1-16, September.
    12. Yuta Kuroda, 2022. "What does the disclosure of school quality information bring? The effect through the housing market," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 125-149, January.
    13. Keren Mertens Horn, 2017. "School Accountability and Residential Location Patterns: Evaluating the Unintended Consequences of No Child Left Behind," Working Papers 17-28, Center for Economic Studies, U.S. Census Bureau.
    14. Crocker H. Liu & Patrick S. Smith, 2023. "School quality as a catalyst for bidding wars and new housing development," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(4), pages 785-818, July.
    15. Xiao Tian & Jin Liu & Yong Liu, 2022. "How Does the Quality of Junior High Schools Affect Housing Prices? A Quasi-Natural Experiment Based on the Admission Reform in Chengdu, China," Land, MDPI, vol. 11(9), pages 1-18, September.

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