SCHOOL QUALITY AND INFORMATION DISCLOSURE: EVIDENCE FROM THE HOUSING MARKET

Authors

  • PAUL CARRILLO,

    1. Carrillo: Department of Economics, George Washington University, Washington, DC. Phone 202-994-7608, Fax 202-994-6147, E-mail pcarrill@gwu.edu
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  • STEPHANIE R. CELLINI,

    1. Cellini: Trachtenberg School, George Washington University, Washington, DC. Phone 202-271-4795, Fax 202-994-6792, E-mail scellini@gwu.edu
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  • RICHARD K. GREEN

    1. Green: SPPD and FBE, University of Southern California, Los Angeles, CA. Phone 213-740-4093, Fax 213-740-6170, E-mail richarkg@usc.edu
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    • We thank Yongqiang Chu, Dylan Conger, David Figlio, Nora Gordon, Tony Yezer, seminar participants at the University of British Columbia, and conference participants at the American Economic Association and American Real Estate and Urban Economics Meetings for helpful comments. We are especially grateful to Ryan McKinley for his help with geo-coding. A previous version of this article was titled, “Surfing for Scores: School Quality, Housing Prices, and the Changing Cost of Information.”


Abstract

In this article, we investigate the relationship between school quality and information disclosure in housing markets. When presented with the option of identifying their local public school in a real estate listing, we find that sellers with homes assigned to higher-performing schools are more likely to provide this information. We find more evidence of selective disclosure in 2001–2002 than in 2006–2007, when the costs of gathering and disclosing information on school assignments and quality were lower. Furthermore, we find more evidence of strategic behavior among sellers of large single-family units that presumably appeal to families with children. After controlling for school quality, information disclosure does not appear to affect housing prices. Taken together, our results support the findings of the education literature on the importance of school quality capitalization in residential real estate and they provide the first evidence of strategic information disclosure in housing markets. (JEL L15, I20, R31)

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