School Labels & Housing Values: Potential consequences of NJDOE’s new arbitrary & capricious school ratings
There exists relatively broad agreement in the empirical literature that perceived quality of local public goods and services – including local public schools – influences significantly the value – as represented in demand/sales prices – of residential property. In other words – perceived school quality affects housing prices and housing values. All else equal, one pays a premium to live in a school district or attendance zone within a district that is associated with a “good” school.
Indeed this “capitalization” of school quality (perceived or real) in home values is at the root of much of the disparity underlying highly residentially segregated state education systems. It’s a long run, complex chicken-egg cycle sort of thing. Some communities have more which allows them to spend more… to improve perceived quality… and capitalize that value into their homes/property values, increasing the town’s ability to raise revenue
Indeed this “capitalization” of school quality (perceived or real) in home values is at the root of much of the disparity underlying highly residentially segregated state education systems. It’s a long run, complex chicken-egg cycle sort of thing. Some communities have more which allows them to spend more… to improve perceived quality… and capitalize that value into their homes/property values, increasing the town’s ability to raise revenue
