School Quality, Neighborhoods, and Housing Prices

We study the relationship between school characteristics andhousing prices in Mecklenburg County, North Carolina, between1994 and 2001. During this period, the school district was operatingunder a court-imposed desegregation order and drew school boundariesso that students living in the same neighborhoods were oftensent to very different schools in terms of racial mix and averagetest scores of the students. We use differences in housing pricesalong assignment zone boundaries to disentangle the effect ofschools and other neighborhood characteristics. We find systematicdifferences in house prices along school boundaries althoughthe impact of schools is only one-quarter as large as the naivecross-sectional estimates would imply. Part of the impact ofschool assignments is mediated by differences in the characteristicsof the population and the quality of the housing stock thathave arisen on either side of the school assignment boundary.