A National Study of Public School Spending and House Prices

Peter Blair
Event speaker

Peter Blair, Assistant Professor of Education, Harvard University

Thursday, January 28, 2021 - 02:00pm–03:00pm

A National Study of Public School Spending and House Prices (joint w/ Patrick Bayer and Kenneth Whaley)

We conduct the first national study of the causal impact of school spending and local taxes on housing prices by pairing variation induced by school finance reforms with 25 years of national data on housing prices. Our analysis speaks to two classic questions in economics: whether school spending matters and whether it is provided at efficient levels. The results indicate that households highly value school spending and, in particular, spending on the salaries of teachers and staff. Moreover, we find that salary spending is provided at inefficiently low levels throughout much of the United States, as increases in salary spending within a school district funded entirely by local taxes would generally raise house prices. Our analysis points to both the hiring of more teachers and increasing teacher pay as mechanisms for improving the efficiency of the provision of public schooling in the United States.