Distribution of Demand for School Quality: Evidence from Quantile Regression

Abstract

This paper empirically examines the distribution of demand for school quality using quantile regression to analyze housing market data. The study takes advantage of a courtordered redistricting as a quasi-random assignment of school quality. After controlling for unobserved characteristics using subdivision fixed-effects, we show that high-income families place significantly greater value on academic achievement than low-income families. The average effects as estimated by OLS conceal considerable heterogeneity in demand for academic achievement due to the “aggregation” of families' differential willingness to pay. A similar trend is absent for non-academic quality.

Publication Title

Journal of Housing Research

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