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Ranking Up by Moving Out: The Effect of the Texas Top 10% Plan on Property Values

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  • Cortes, Kalena E.

    (Texas A&M University)

  • Friedson, Andrew I.

    (University of Colorado Denver)

Abstract

Texas engaged in a large-scale policy experiment when it instituted the Top 10% Plan. This policy guarantees automatic admission to their state university of choice for all high school seniors who graduate in the top decile of their high school class. We find evidence that households reacted strategically to this policy by moving to neighborhoods with lower-performing schools, increasing both property values and the number of housing units in those areas. These effects are concentrated among schools that were very low-performing before the change in policy; property values and the number of housing units did not change discontinuously for previously high-performing school districts. We also find evidence that these strategic reactions were influenced by the number of local schooling options available: areas that had fewer school choices showed no reaction to the Top 10% Plan.

Suggested Citation

  • Cortes, Kalena E. & Friedson, Andrew I., 2010. "Ranking Up by Moving Out: The Effect of the Texas Top 10% Plan on Property Values," IZA Discussion Papers 5026, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5026
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    References listed on IDEAS

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    1. Barrow, Lisa & Rouse, Cecilia Elena, 2004. "Using market valuation to assess public school spending," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1747-1769, August.
    2. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(2), pages 577-599.
    3. Cortes, Kalena E., 2010. "Do Bans on Affirmative Action Hurt Minority Students? Evidence from the Texas Top 10% Plan," IZA Discussion Papers 5021, Institute of Labor Economics (IZA).
    4. Cullen, Julie Berry & Long, Mark C. & Reback, Randall, 2013. "Jockeying for position: Strategic high school choice under Texas' top ten percent plan," Journal of Public Economics, Elsevier, vol. 97(C), pages 32-48.
    5. Clapp, John M. & Nanda, Anupam & Ross, Stephen L., 2008. "Which school attributes matter? The influence of school district performance and demographic composition on property values," Journal of Urban Economics, Elsevier, vol. 63(2), pages 451-466, March.
    6. Kalena E. Cortes, 2010. "Do Bans on Affirmative Action Hurt Minority Students? Evidence from the Texas Top 10% Plan," Upjohn Working Papers 10-168, W.E. Upjohn Institute for Employment Research.
    7. Bogart, William T. & Cromwell, Brian A., 1997. "How Much More Is a Good School District Worth?," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(2), pages 215-232, June.
    8. Epple, Dennis & Filimon, Radu & Romer, Thomas, 1993. "Existence of voting and housing equilibrium in a system of communities with property taxes," Regional Science and Urban Economics, Elsevier, vol. 23(5), pages 585-610, November.
    9. Bogart, William T. & Cromwell, Brian A., 1997. "How Much More is a Good School District Worth?," National Tax Journal, National Tax Association, vol. 50(2), pages 215-32, June.
    10. Chernick, Howard & Langley, Adam & Reschovsky, Andrew, 2011. "The impact of the Great Recession and the housing crisis on the financing of America's largest cities," Regional Science and Urban Economics, Elsevier, vol. 41(4), pages 372-381, July.
    11. Cortes, Kalena E., 2010. "Do bans on affirmative action hurt minority students? Evidence from the Texas Top 10% Plan," Economics of Education Review, Elsevier, vol. 29(6), pages 1110-1124, December.
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    Cited by:

    1. Cullen, Julie Berry & Long, Mark C. & Reback, Randall, 2013. "Jockeying for position: Strategic high school choice under Texas' top ten percent plan," Journal of Public Economics, Elsevier, vol. 97(C), pages 32-48.
    2. Liu, Haoyang & Song, Yang & Zhang, Xiaohan, 2022. "Moving to better opportunities? Housing market responses to the top 4% policy," Regional Science and Urban Economics, Elsevier, vol. 97(C).
    3. Fernanda Estevan & Thomas Gall; Patrick Legros; Andrew F. Newman, 2014. "College Admission and High School Integration," Working Papers, Department of Economics 2014_26, University of São Paulo (FEA-USP).
    4. Cortes, Kalena E. & Klasik, Daniel, 2020. "Uniform Admissions, Unequal Access: Did the Top 10% Plan Increase Access to Selective Flagship Institutions?," IZA Discussion Papers 13988, Institute of Labor Economics (IZA).
    5. Andrew Bibler & Stephen B. Billings, 2020. "Win or Lose: Residential Sorting After a School Choice Lottery," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 457-472, July.
    6. Fajnzylber, Eduardo & Lara, Bernardo & León, Tomás, 2019. "Increased learning or GPA inflation? Evidence from GPA-based university admission in Chile," Economics of Education Review, Elsevier, vol. 72(C), pages 147-165.
    7. Cortes, Kalena E., 2010. "Do Bans on Affirmative Action Hurt Minority Students? Evidence from the Texas Top 10% Plan," IZA Discussion Papers 5021, Institute of Labor Economics (IZA).
    8. Cortes, Kalena E., 2010. "Do bans on affirmative action hurt minority students? Evidence from the Texas Top 10% Plan," Economics of Education Review, Elsevier, vol. 29(6), pages 1110-1124, December.
    9. Newman, Andrew & Gall, Thomas & Estevan, Fernanda, 2017. "The Top-Ten Way to Integrate High Schools," CEPR Discussion Papers 11910, C.E.P.R. Discussion Papers.
    10. Klasik, Daniel & Cortes, Kalena E., 2022. "Uniform admissions, unequal access: Did the top 10% plan increase access to selective flagship institutions?," Economics of Education Review, Elsevier, vol. 87(C).
    11. Friedson, Andrew I. & Bogin, Alexander N., 2013. "Winning pays: High school football championships and property values," Journal of Housing Economics, Elsevier, vol. 22(1), pages 54-61.

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    More about this item

    Keywords

    affirmative action; college choice; property values; Top 10% Plan;
    All these keywords.

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • I20 - Health, Education, and Welfare - - Education - - - General

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