Public high-school quality and house prices
Hearn, Edward McLeod
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From its origin as a small Southern county seat, Charlotte has grown into a major urban economy. This swift economic expansion has required city authorities to respond by changing both the nature and provision of Charlotte’s public goods. This dissertation examines the impacts of city-amenity provisions on house prices in Charlotte from 1997 to 2010. Chapter 1 provides a concise review of house-price capitalization of public-good amounts and qualities from different locations in the U.S. and abroad, and across a variety of empirical modelling strategies. Chapter 2 examines the fallout of a district-wide change in public-school assignment on house prices in Charlotte and Mecklenburg County, NC. The local school board shifted from a race-based assignment policy to a neighborhood assignment policy and also incorporated a school-choice lottery. This occurred after a 2002 Supreme Court decision disallowed the school board from using race as the primary assignment mechanism for local high schools. Results indicate that parents are willing to pay premia for houses in better quality high-school zones, but only if the increase in quality is substantial. Chapter 3 examines whether increases in public amenities provide arbitrage opportunities for speculative purchasing of houses in areas where these amenities were previously lacking. Findings suggest that house-price speculators make rational decisions to purchase in neighborhoods with a high probability of experiencing gentrification. Moreover, speculative behavior is predictable based on preferences for house and neighborhood attributes.