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School Quality, Residential Choice, and the U.S. Housing Bubble

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  • Michael Insler
  • Kurtis Swope

Abstract

Using data from the American Housing Survey (years 2001--2009), we find that purchase prices for homes selected primarily to access self-identified “good schools” rose (relative to homes selected for other reasons) during the key U.S. housing bubble period, compared with the periods before and after the bubble. We observe a similar pattern in homebuyers' mortgage-to-income ratios. Various regression specifications and propensity score matching techniques show that these trends persist conditional on a range of household, demographic, and economic controls. Our results suggest that the strong, bubble-era pursuit of good schools may have played a role in the housing bubble's expansion.

Suggested Citation

  • Michael Insler & Kurtis Swope, 2016. "School Quality, Residential Choice, and the U.S. Housing Bubble," Housing Policy Debate, Taylor & Francis Journals, vol. 26(1), pages 53-79, January.
    • Handle: RePEc:taf:houspd:v:26:y:2016:i:1:p:53-79
    DOI: 10.1080/10511482.2014.956777
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    References listed on IDEAS

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    1. Peter J. Wallison, 2011. "Dissent from the Majority Report of the Financial Crisis Inquiry Commission," Books, American Enterprise Institute, number 50848, September.
    2. repec:aei:rpaper:26126 is not listed on IDEAS
    3. Jon H. Fiva & Lars J. Kirkebøen, 2008. "Does the Housing Market React to New Information on School Quality?," Discussion Papers 541, Statistics Norway, Research Department.
    4. repec:aei:rpbook:24944 is not listed on IDEAS
    5. Peter J. Wallison, 2011. "A dissent from the majority report of the financial crisis inquiry commission," Proceedings 1118, Federal Reserve Bank of Chicago.
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