Estimates of the Effect of School Desegregation Plans on Housing Values Over Time

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Abstract
This study investigates the impact that school desegregation can have on the market values of affected residential properties. It improves upon previous studies in that it is able to estimate not only the “racial enrollment” effect but also “other” desegregation‐related effects correlated with white perceptions of school quality, etc. Through the use of a controlled longitudinal and cross‐sectional data set of property sales and a ridge‐regression methodology, it is able to estimate these effects over time and separate them from amenity‐related effects. Results are significant in that they predict substantial desegregation‐related effects on house values over time, averaging 11.4% of property value, which correlate with school desegregation court rulings and other events. Furthermore, over one‐third of the magnitude of this discount is related to desegregation factors other than actual racial enrollment patterns in the schools.

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