By Arnold Kling
From a summary of a study by Donald Haurin and David Brasington:
The study of Ohio school districts showed that an increase of about 20 percentage points in the proficiency test “pass rate” increased house values in a district about 7 percent, even after taking into account other factors that impact house values.
…A student from a privileged background, in a high-income school district, may arrive at school well-prepared and start out scoring well on standardized tests. Years of schooling may not improve that student’s scores. “That school district will look good on average test scores no matter what it does with its students. And its high rating may not be deserved,” Haurin said.
On the other hand, a disadvantaged student in a different school district could end up improving his test scores more than the privileged student, all because he went to a high-quality school. But in the end, if his test scores are not as high as that of the privileged student, the school will not get as much credit, at least in terms of house prices.
“So you can’t look only at proficiency test scores as an outcome and say that is a measure of school quality,” Haurin said. “But that’s what homebuyers in our study did when they were looking for houses.”
Thanks to Nick Schulz for pointing me to Randall Parker’s post on the study.I think that what the researchers are observing is a segregation equilibrium. Affluent parents want their children to go to schools with other affluent parents, regardless of school quality. This may be a status issue. Alternatively, it could be rational. If peer influence is the most important characteristic of a school, and you want your kids to do well in school, maybe it is best to send them to a school where kids generally try to do well in school.
In any case, segregation equilibrium is a challenge for either a voucher system or our current system. If parents will pay extra, in terms of tuition or house prices, to avoid having their children go to school with relatively poor children, then it is hard for poor children to get into schools with achievement-oriented peers.