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Does the market value value-added? Evidence from housing prices after a public release of school and teacher value-added

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  • Imberman, Scott A.
  • Lovenheim, Michael F.

Abstract

Value-added data have become an increasingly common evaluation tool for schools and teachers. Many school districts have begun to adopt these methods and have released results publicly. In this paper, we use the unique public release of value-added data in Los Angeles to identify how this measure of school quality is capitalized into housing prices. Via difference-in-differences, we find no evidence of a response to either school or teacher value-added rank, even though school-zone boundary fixed-effects estimates indicate that test score levels are capitalized into home prices. Given ample evidence that this information was new to residents, widely dispersed, and easily available, our results suggest that people did not significantly value it on the margin. This has implications for the effectiveness of providing value-added information as a tool to help parents choose schools.

Suggested Citation

  • Imberman, Scott A. & Lovenheim, Michael F., 2016. "Does the market value value-added? Evidence from housing prices after a public release of school and teacher value-added," Journal of Urban Economics, Elsevier, vol. 91(C), pages 104-121.
    • Handle: RePEc:eee:juecon:v:91:y:2016:i:c:p:104-121
    DOI: 10.1016/j.jue.2015.06.001
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    More about this item

    Keywords

    Value-added; Housing prices; School quality capitalization; Education;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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