Mobility, Housing Markets, and Schools: Estimating General Equilibrium Effects of Interdistrict Choice

In theoretical models of residential sorting, a household’s location decision is closely tied to its demand for consuming local public services. School choice programs typically weaken the link between residential location and schooling options. Computable general equilibrium models suggest large general equilibrium effects from expanded school choice, but there is limited empirical evidence concerning whether these effects occur. This paper develops and empirically tests predictions concerning the general equilibrium effects of inter-district choice programs. Consistent with theory, districts with popular nearby, out-of-district schooling options experience relatively large increases in housing values and in the number of households with children. ______________ * Brunner: Department of Economics, Quinnipiac University, 275 Mount Carmel Ave, Hamden, CT 06518, [email protected]; Cho: Teachers College, Columbia University, 525 W. 120th Street, Box 66, New York, NY 10027, [email protected]; Reback (corresponding author): Department of Economics, Barnard College, Columbia University, 3009 Broadway, New York, NY 10027-6598. 212854-5005, [email protected]. We thank Spencer Banzhaf, Bob Bifulco, Julie Cullen, Mark Long, Jonah Rockoff, Jon Sonstelie, Miguel Urquiola, and seminar participants at Columbia University and the University of Connecticut for their helpful comments and suggestions.