Why do households without children support local public schools? Linking house price capitalization to school spending

Christian Hilber and Christopher Mayer

Journal of Urban Economics, 2009, vol. 65, issue 1, 74-90

Abstract: While residents receive similar benefits from many local government programs, only about one-third of all households have children in public schools. We argue that capitalization of school spending into house prices can encourage even childless residents to support spending on schools. We identify a proxy for the extent of capitalization--the supply of land available for new development--and show that towns in Massachusetts with little undeveloped land have larger changes in house prices in response to a plausibly exogenous spending shock. Towns with little available land also spend more on schools. We extend these results using data from school districts in 46 states, showing that per pupil spending is positively related to the percentage of developed land. This positive correlation persists only in districts where the median resident is a homeowner and is stronger in districts with more elderly residents who do not use school services and have a shorter expected duration in their home. Our findings support models in which capitalization encourages the provision of durable local public goods and provides an additional reason why some elderly support local school spending.

Keywords: Capitalization; Elderly; Land; supply; School; spending (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (122)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0094-1190(08)00098-3
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Why do households without children support local public schools? linking house price capitalization to school spending (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:65:y:2009:i:1:p:74-90

Access Statistics for this article

Journal of Urban Economics is currently edited by S.S. Rosenthal and W.C. Strange

More articles in Journal of Urban Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().