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EVALUATING THE WELFARE EFFECTS OF SCHOOL QUALITY IMPROVEMENTS: A RESIDENTIAL SORTING APPROACH

Authors


  • We are grateful to Charles Towe and Bob Potts for assistance in the data collection. We thank Steve Miller, John Yinger, and seminar participants at the 2011 annual meetings of the Urban Economics Association for helpful comments.

ABSTRACT

Las Vegas experienced improvements in math and reading performance between 2006 and 2011. This study evaluates the benefits of these nonmarginal improvements to Las Vegas area homeowners, using a residential sorting model. We estimate households’ preferences for multiple characteristics including the proportion of proficient students in their assigned elementary school. The estimation accounts for the endogeneity of school quality using school boundary fixed effects. The welfare estimates suggest that the school quality improvements provided substantial benefits to the area's households. We find that benefit measures derived from a hedonic price model are substantially larger than our sorting model benefit measures.

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