The Impact of Public School Attributes on Home Sale Prices in California

The quality of public schools is often cited as an important attribute which distinguishes a community. Indeed, a recent public opinion poll conducted by the California Public Education Partnership indicates that residents rank improvements in public education higher than such high profile issues as environmental quality and crime reduction. In order to explore the role of educational quality in determining residential property values, a hedonic housing price model is used on a large sample of homes which sold within Fresno County in California over the period 1990-1994. After controlling for a wide range of housing characteristics and neighborhood features, the findings indicate that the school district does significantly influence the real sale price. Then the relative importance of inputs into the production of educational services is investigated as compared to output measures of productivity. These findings suggest that both input and output measures are important. However, elasticity estimates of input measures tend to be higher than those of output measures, with the average class size by far the strongest influence. There is some evidence to suggest that the benefits of additional teachers likely outweigh the costs. Finally, the findings suggest that attributes of schools are more highly valued by local residents than either crime or environmental quality measures within the community