The Impact of Education Reforms on Property Values

The last two decades have been marked by an unparalleled growth in the involvement of federal and state governments in the provision of elementary and secondary education, with such important policy changes as federal mandates for accountability as exemplified by No Child Left Behind (NCLB) Act and state-level legislation that has broadened public school choice (e.g., charter schools) and reformed the systems for financing the schools. To provide context for the review of the research on the impact of policy changes, this article begins with a a brief review of this recent literature on the hedonics of schooling, focusing on recent studies that have taken advantage of methodological and data improvements to address lingering concerns about the results of the preceding research. The newer research has consistently shown that home buyers value higher standardized test scores and other readily observable attributes of schools that are perceived to be correlated with school quality. The latter portion of this paper indicates how these recent studies have influenced research examining the impact on property values of major changes in federal or state policy, such as the introduction of school choice or accountability or as the reworking of a state’s system of school finance. The results of this research are summarized, and suggestions are made for work that can close gaps in our knowledge about the effects of these policy changes.