Despite extensive public infrastructure spending, surprisingly little is known about its economic return. In this paper, we estimate the value of school facility investments using housing markets: standard models of local public goods imply that school districts should spend up to the point where marginal increases would have zero effect on local housing prices. Our research design isolates exogenous variation in investments by comparing school districts where referenda on bond issues targeted to fund capital expenditures passed and failed by narrow mar-gins. We extend this traditional regression discontinuity approach to identify the dynamic treatment effects of bond authorization on local housing prices, student achievement, and district composition. Our results indicate that California school districts underinvest in school facilities: passing a referendum causes immedi-ate, sizable increases in home prices, implying a willingness to pay on the part of marginal homebuyers of $1.50 or more for each $1 of capital spending. These effects do not appear to be driven by changes in the income or racial composition of homeowners, and the impact on test scores appears to explain only a small portion of the total housing price effect. I.

Recent studies point to a positive correlation between ethnic heterogeneity due to immigration and the propensity of opting out from public schools for private alternatives. However, immigration across regions is hardly exogenous, which obstructs attempts to reveal causal mechanisms. This paper explores changes in the immigrant population in Danish municipalities 1992-2004, a period marked by a substantial influx of refugees, where a state-sponsored placement policy restricted their initial choice of residence. Besides such demographic changes, for more than hundred years Denmark has allowed parents to enroll their children into so called ‘free schools’, i.e. schools that are privately operated. Taken together, this provides a unique opportunity to determine if there has been ‘native flight ’ from public schools to free schools. Results from this study indicate an increase in native Danes propensity to enroll their children in free schools as the share of children with immigrant background becomes larger in their municipality of residence. The effect is most pronounced in small and medium sized municipalities, while it seems absent in larger municipalities. One explanation for the latter holds that residential segregation within larger municipalities makes a choice of private alternatives less attractive.

All in-text references underlined in blue are linked to publications on ResearchGate, letting you access and read them immediately.

Two-year colleges enroll 41 percent of first-time freshmen and more than 6.6 million students every year (National Center for Education Statistics 2007),1 yet surprisingly little is known about these institutions and their students. While a num-ber of economists have studied public two-year colleges—more commonly known as community or junior colleges2—few have devoted attention to their private coun-terparts or to the interaction of the public and private sectors.3 Private two-year colleges, often called proprietary schools, trade schools, vocational institutes, or for-profits, have been particularly difficult to study due to a lack of reliable data. This article begins to fill this gap. Using a new dataset of California proprietary schools and a unique identification strategy, I assess the extent of competition between

An analysis of the effect of a 21st-century-designed middle school on student achievement

ABSTRACT. Willingness-to-pay is important for welfare analysis. The two primary approaches to estimate marginal willingness-to-pay (MWTP) for differentiated goods are hedonics (Rosen, 1974) and discrete choice models (McFadden, 1974). For many years, researchers have alluded to the apparent duality between both models. The innovation in this paper is to show that the hedonic MWTP can be written as a function of choice probabilities in the discrete choice model. I find that the hedonic method estimates a weighted average of marginal utilities where higher weights are associated with consumer types whose choice probabilities indicate a high variance regarding their choice (marginal consumers). This variance decreases as choice probabilities approach 0 or 1. Therefore, the hedonic method gives more weight to the preferences of the marginal consumer relative to the discrete choice approach. We can use these probability weights to analyze how MWTP in the discrete choice model differs from MWTP in the hedonic model. 1.

A large body of international research has provided evidence of a house price response to local school quality measured in terms of outputs such as school average test scores. But better school average test scores could occur through improvements in school intake ability or through better progress within schools, and existing house price studies rarely differentiate between these two channels. Our research estimates the response of house prices to both school composition, ‘valueadded’ and resources, and is thus able to distinguish more clearly between the role of composition, expenditure and expected pupil progress in the demand for schooling. In order to achieve consistent estimates, we push the use of geographical boundary discontinuities in hedonic models to the limit by matching identical properties across education admissions authority boundaries; by allowing for a variety of boundary effects and spatial trends; by re-weighting our data to only consider the transactions that are closest to education district boundaries (on average 200 metres); and by submitting the data to a number of potentially highly destructive falsification tests. Our results survive this battery of experiments and show that a one-standard deviation change in either value-added or prior achievement raises prices by around 3%. We find no

INTRODUCTION.......................................................................................................1

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior permission in writing of the publisher nor be issued to the public or circulated in any form other than that in which it is published. Requests for permission to reproduce any article or part of the Working Paper should be sent to the editor at the above address. The Centre for the Economics of Education is an independent multidisciplinary research centre. All errors and omissions remain the authors. Valuing School Quality Using Boundary Discontinuities

The two primary approaches to estimate marginal willingness-to-pay (MWTP) are hedonic (Rosen, 1974) and discrete choice models (McFadden, 1974). This paper provides a tractable framework to investigate the relationship between MWTP in these models. By deriving the he-donic price gradient implicitly from the share function in the discrete choice model, I present an analytical mapping between the hedonic gradient (hence, the hedonic MWTP) and choice probabilities in the discrete choice model. Intuitively, the hedonic MWTP depends on weighted averages of marginal utilities where higher weights are assigned to individuals whose choice probabilities indicate more uncertain choices (marginal individuals). As this choice becomes more certain, the weights start to decrease. Since the hedonic method relies on tangencies be-tween indifference curves and the hedonic price function to identify MWTP, inframarginal in-dividuals (whose bid functions are not tangent to the hedonic price function) have low weights (they have choice probabilities that are close to 0 or 1 and low choice variances). This novel analytical mapping between the hedonic gradient and the share function can be used to identify conditions when MWTP in the two models are similar. (JEL: C01, R21, J23)