A National Study of School Spending and House Prices

This is 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. The 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, 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.